Growth In Spending Exceeds Growth In Income For Most Of The Last 10 Months -

Growth In Spending Exceeds Growth In Income For Most Of The Last 10 Months

Apr 27, 2024Jeremy ParkinsonFinance0

A deeper dive into personal income and outlays for March shows significant signs of consumer stress to maintain standards of living. Real Income and spending data from the BEA, chart by MishThis is a follow-up with a couple new charts to my post on Friday, Personal Spending Jumps More than Income in March Income Minus Spending Chart Notes

Real means after inflation. DPI means disposable Personal Income after taxes.

Only twice in the last 10 months has growth in real income been greater than growth in real spending.

Personal Income Four Ways Understanding Personal Income

The difference between PI (red) and DPI (blue) is taxes, just over 3 trillion dollars annually.

The difference between DPI (blue) and Real DPI (yellow) is inflation.

The difference between Real DPI (yellow) and Real DPI Minus PCTR (green) is Personal Current Transfer Receipts

PCTR are government benefits that include Medicare, Medicaid, food stamps, Social Security, and disability payments. Personal Income and Real Hourly Wages Income data from the BEA, hourly earnings from the BLS, chart by Mish Percentage Increases in Income and Hourly Earnings

DPI is up 25.2 percent since pre-pandemic

Real DPI is up 6.6 percent since pre-pandemic

Real Average Hourly Earnings are up 0.9 percent since pre-pandemic

Income includes wages and salaries, Social Security and other government benefits, dividends, and interest. Who’s Doing Well and Who Isn’t?Those dependent on wages and salaries alone have not fared well since the pandemic. That also includes many on government benefits.The asset holders (those with interest income, rental income, dividend income etc., are doing much better.On average, things look at least OK, if not good.But for millions of people struggling with food and rent on real hourly earnings that have gone nowhere in four years, the economy does not look OK. The CPI Rose Sharply in March Led by Shelter and Gasoline The CPI rose 0.4 percent in March. Rent was up another 0.4 percent with gasoline up 1.7 percent. Together, the pair was about half of the total rise.Rent of primary residence, the cost that best equates to the rent people pay, jumped another 0.4 percent in March. Rent of primary residence has gone up at least 0.4 percent for 31 consecutive months! The “rents are falling” (or soon will) projections have been based on the price of new leases and cherry picked markets. But existing leases, much more important, keep rising.Only 8 to 9 percent of renters move each year. It’s been a huge mistake thinking new leases and finished construction would drive rent prices.More By This Author:Ford Loses $132,000 On Each EV Produced, Good News, EV Sales Down 20 PercentPersonal Spending Jumps More than Income in MarchExpect Big Negative Revisions To BLS Monthly Jobs In 2023, GDP Too

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