Economists are projecting no change to a slight decline for tomorrow’s January update on personal consumption expenditures (PCE) vs. December. The consensus forecast via Econoday.com, for instance, is zero; Briefing.com’s survey of analysts expects a marginal loss. It all adds up to a good guess, based on last month’s release on retail sales, which slumped 0.8% in January. The positive spin is that headline spending is weak because of “falling gasoline sales in dollar terms,” as I discussed a few weeks ago, which is to say that the trend still looks encouraging after excluding spending at the pump—particularly on a year-over-year basis. That’s still my working assumption, in part because payrolls continue to rise at a robust pace. The main event for Monday will be deciding if the PCE data offers a different perspective.

Whatever the explanation, headline PCE for January will be flat, according to the implied change via a linear regression model. Applying the historical record between PCE and retail sales, which is closely linked—not surprisingly—suggests no change in tomorrow’s report (blue dot). Even assuming that spending is flat translates into a year-over-year growth rate of around 3.8%, slightly better than December’s 3.6% annual advance. Not great, but strong enough to leave the positive spin intact.  A major downside surprise, on the other hand, would be another matter.