ECONOMIC UPDATE: Disposable Income Up in August

By at 27 September, 2019, 2:56 pm

 by Raymond J. Keating-

According to a report from the U.S. Bureau of Economic Analysis, personal income grew by 0.4 percent in August. That marked a return to strong growth after July essentially being flat.

The most important measure in this report is real per capita personal disposable income, that is, personal income less personal current taxes, and adjusted for population and inflation. This is the income available for people to use for saving, investing and consuming. After a decline in July, growth resumed in August.

Source: Federal Reserve Bank of St. Louis, FRED

The July decline in real per capita disposable income was the first monthly drop since September of last year. In fact, real per capita disposal income has only experienced declines in two months over the past two years. That’s an impressive run, and has served as key factor in terms of feeding economic growth.

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

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