U.S. CREDIT MARKET OUTLOOK - SPENDING, M-1 Brisk increases in personal income and consumption are to appear in February data released today, but the bond market's recent sluggishness suggests there will be no major price reaction unless the rises are much larger than expected, economists said. Personal income is forecast to rise by 0.6 to 0.8 pct, compared with no change in January, while consumption expenditures are projected to increase 1.4 to 1.6 pct, reversing most of the two pct drop recorded in January. M-1 money supply data for the March 9 week will also be released. An increase of some 2.3 billion dlrs is expected. Peter Greenbaum of Smith Barney, Harris Upham and Co Inc expects a one pct rise in income, led by a strong gain in wage and salary disbursements in February. Nonfarm payrolls expanded by 337,000 jobs in February, the average workweek lengthened by 0.6 pct and hourly wages rose by four cts, he noted in a report. Vigorous spending on durable goods last month, especially cars, foreshadow a rise of at least 1.5 pct in consumption, he added. The prospect of bearish data did not trouble the bond market much yesterday, with the 30-year Treasury bond slipping just 7/32 to 99-28/32 for a yield of 7.51 pct. Analysts said the market is still trapped in a narrow range, desperately seeking direction. "Seasonally adjusted, it's already December in the bond market," quipped Robert Brusca of Nikko Securities Co International Inc. Paul Boltz of T. Rowe Price Associates Inc said the steadiness of long bond yields around 7.5 pct, despite some signs of a stronger economy, probably reflects expectations that inflation will remain subdued. But he warned that this assumption might not be justified. "It took the bond market a long while to see that inflation was not returning to double digits, and now that it has learned that lesson, it may be a little slow to see that a four to five pct inflation is a real possibility ahead," Boltz said in a report. After trading late yesterday at 5-15/16 pct, Fed funds were indicated by brokers to open comfortably at 5-15/16, six pct.