Friday, March 27, 2009

Real Disposable Personal Income Grows by 2.2%

From Table 10 in today's BEA report on Personal Income, real disposable income increased 2.2% in February, compared to February last year (see chart above). This is the 5th consecutive month of positive growth in real personal income compared to the same month in the previous year, following negative growth in August and September of last year. The 2.2% increase in real disposable income is just slightly below the 2.3% average over the last four years.

3 Comments:

At 3/27/2009 9:40 AM, Blogger spencer said...

All of this rise in real income is due to the drop in the price of oil from almost $150 to a bottom of $30 in December. Now that oil has rebounded from $30 to over $50 the gains in real income have disappeared in recent months.

Rebounding oil prices are the greatest threat to an economic recovery.

 
At 3/27/2009 2:55 PM, Blogger ExtremeHobo said...

At the same time, an increase in oil prices will be the result of an economic recovery. What a catch 22!

 
At 3/27/2009 3:11 PM, Blogger stilettoheels said...

Real gasoline,oil consumption has been flat this decade. It actually peaked in 2005. The same is true of energy goods and services.

BEA Table 2.3.5

The major reason for the year over year increase in nominal disposable income is lower personal current taxes.

For February year over year, nominal personal income rose $121 (billions), nominal personal current taxes declined $218 and nominal personal outlays declined $80. So about half of the increase in personal disposable income of $450 is lower taxes.

BEA Table 2.6.

 

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