5 Key Points on Personal Income

By at 31 March, 2019, 7:20 am

by Raymond J. Keating-

Due to the government shutdown, the latest news on personal income released by the U.S. Bureau of Economic Analysis combined January and February data, but also was incomplete.

Here are the few key points from the report:

● Personal income actually declined in January by 0.1 percent. That was the first decline since November 2015. For good measure, real disposable personal income fell by 0.2 percent in January. That was the first decline since June 2017.

● However, personal income growth resumed in February – up by 0.2 percent. Nominal disposable income also grew by 0.2, but the data for real disposable income was not yet available.

● For all of 2018, personal income grew by 4.9 percent. That shows improvement over the last two years, as personal income growth by 2.6 percent in 2016, 4.4 percent in 2017 and 4.5 percent in 2018.

● Similar improvement could be found in terms of real disposable income growth, moving from 1.7 percent in 2016, 2.6 percent in 2017, and 2.9 percent in 2018.

● Finally, growth in real per capita disposable income accelerated over the past two years, with growth registering 0.99 percent 2016, 1.94 percent in 2017, and 2.24 percent in 2018. The 2018 growth level of 2.24 percent topped the average annual growth rate of 2.15 percent for the past near-six-decades.

As SBE Council has noted before, the key personal income measure to watch is real per capita disposable income, that is, after-tax income adjusted for inflation and population. Continued growth on that front is critical for the economy.


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

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