Personal Income Report: More Bad News

By at 29 July, 2022, 10:46 am

by Raymond J. Keating –

Coming on the heels of a grim GDP report pointing to recession, no one should have expected anything good in the latest personal income report released on July 29. And as it turned out, there wasn’t anything positive in this latest economic measure.

For June, the 0.6 percent nominal increase in personal income turned into a decline when the report’s inflation measure – i.e., the personal consumption expenditures (PCE) index – which jumped by 1.0 percent in June, was factored into the equation.

And real personal consumption expenditures managed to grow by 0.1 percent.

Meanwhile, real disposable personal income (i.e., personal income less personal current taxes and adjusted for inflation) declined by 0.3 percent. And on a per capita basis, real personal disposable income has been on a steady decline over the past year (when clear of distortions from government pandemic checks).

Source: Federal Reserve Bank of St. Louis, FRED

In fact, the June 2022 level of real per capita disposable income actually was below the pre-pandemic February 2020 level. Keep in mind that disposable income is what individuals use to consume, invest and save.

More amazing and disturbing is the fact that the Biden administration and Congress are pushing an agenda of tax increases, price controls and more government spending that’s destined to add to, rather than help remedy, our considerable economic woes of recession and high inflation, or stagflation.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His latest book is The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist.






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