February’s Personal Income Report: Lackluster

By at 31 March, 2017, 2:54 pm


by Raymond J. Keating-

The February personal income report from the U.S. Bureau of Economic Analysis offered a few numbers that warrant concern for early 2017.

First, real disposable income (i.e., personal income less personal current taxes, which is the amount of income left for spending, saving and investing) rose by 0.2 percent in February, after a decline of 0.1 percent in January. That’s lackluster, to say the least.

Second, when we look at real per capita disposable income, it turns out that the February level ($39,509 in real 2009 dollars) was effectively the same as the December 2016 level ($39,504). So, no growth in the first two months of the year. For good measure, real per capita disposable income growth slowed notably in the second half of 2016.

Third, personal consumption expenditures (PCE) in this report receives considerable attention given the sizeable role that consumption plays in GDP. During the first two months of this year, real PCE declined – down by 0.2 percent in January and 0.1 percent in February.

Given continuing concerns about private investment (see SBE Council’s most recent analysis on durable goods), this personal income report raises more questions about first quarter GDP growth.

Of course, these numbers fit with the pathetic state of economic growth over the past decade – but they can change with substantive, permanent changes in policymaking, including tax relief and reform, regulatory relief and reform, vast changes to Obamacare to provide small businesses and individuals with relief, and freer trade.


Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

Keating’s latest book published by SBE Council is titled Unleashing Small Business Through IP:  The Role of Intellectual Property in Driving Entrepreneurship, Innovation and Investment and it is available free on SBE Council’s website here.


News and Media Releases