Goldilocks Rocks: Consecutive Monthly Real Disposable Income Growth Strongest Since 1999
The Department of Commerce reported today that disposable income, adjusted for inflation, grew by 3.9% in September compared to the same month a year ago (Table 10 in the report), which marks the 14th consecutive month that real disposable income has increased by 2.9% or higher (the approximate average growth rate since 1970, see horizontal line in graph above). CD Exclusive: This record of consecutive monthly growth in real disposable income hasn't been matched in the U.S. since July 1997 - April 1999, when real income grew at or above 2.9% for 22 months during the height of the last economic expansion (see shaded areas on the graph above, click to enlarge).
The Goldilocks economy keeps rockin'.
Update: Real disposable income is one of the 4 key economic variables that the National Bureau of Economic Research watches to determine when the U.S. economy goes into recession, see my previous post. Given the 14-month record of above-average real personal income growth, it wouldn't appear that a recession is imminent.
4 Comments:
The Goldilocks economy keeps rockin'. . . Given the 14-month record of above-average real personal income growth, it wouldn't appear that a recession is imminent.
"Since 1975, practically all the gains in household income have gone to the top 20% of households."
Source: The World Fact Book, CIA, The Economy - Overview https://www.cia.gov/library/publications/the-world-factbook/print/us.html
And so it appears that 1 out of 5 people might benefit from these apparent gains in Real Disposable Income.
This is the American Dream?
You're leaving out a very important point about the mobility of workers up and down the quintiles over their lifetimes.
The people in the top 20% today are NOT the same people who were in the top 20% in 1979. In fact many in the top 20% today were in the BOTTOM 20% in 1979 and moved up over time. So we could even say that many of the gains over time have gone to those who were in the "bottom 20% in 1979."
Mark J. Perry said...
"You're leaving out a very important point about the mobility of workers up and down the quintiles over their lifetimes.
The people in the top 20% today are NOT the same people who were in the top 20% in 1979. In fact many in the top 20% today were in the BOTTOM 20% in 1979 and moved up over time. So we could even say that many of the gains over time have gone to those who were in the "bottom 20% in 1979."
So what you're saying is that with hard work and/or luck a person can look forward to being in the top quintile of income earners for perhaps 10 to 15 years of their life.
Yes, that's what I'm saying. In 1979 I was in the bottom quintile, today I am probably in the top quintile, and in 10-15 years I'll probably be back in the bottom quintile (by income), in retirement years.
Keep in mind that many retired Americans might be in the bottom quintile by income, even though they are in the top quintile by wealth.
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