Solid Income Growth in January Will Help in an Uncertain Time

By at 29 February, 2020, 8:58 am

by Raymond J. Keating-

The U.S. Bureau of Economic Analysis released a positive personal income report for January 2020 on February 28.

The topline story noted that personal income grew by 0.6 percent in January, with disposable income (i.e., personal income less personal current taxes) also up by 0.6 percent and real disposable income grew by 0.5 percent.

When we look at real per capita disposable income, which adjusts disposable income for inflation and population, it also stepped up nicely in January.  This growth came after some stagnation during a good chunk of 2019.

As to why we highlight real per capita disposable income, this is the income from which individuals make key economic decisions and take actions, that is, the resources used for investing, saving and consuming.

The step up in growth in January is most welcome, and will provide some aid to an economy facing increasing uncertainty relating to the coronavirus.

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


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