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Income and expenditures were up slightly in August

Published on 5 Comments on Income and expenditures were up slightly in August

In addition to its monthly inflation figures, the BEA also released personal spending data today, and it was as boring as it could possibly be. Adjusted for inflation, disposable personal income went up 0.9% and personal spending went up 1.2% (both of these are month-to-month changes that have been annualized). Here's what this looks like over the past two years:

Over the past two years, per capita disposable income has gone down about $5,000 while personal expenditures have gone up $5,000. We're still making more than we're spending, but not by much.

POSTSCRIPT: If those numbers look high to you, it's because they're means, not medians, so they're skewed upward by the income and expenditures of all the gazillionaires. Normally I'd give you medians instead, but the BEA doesn't report them that way.

5 thoughts on “Income and expenditures were up slightly in August”

  1. rick_jones

    Over the past two years, per capita disposable income has gone down about $5,000 while personal expenditures have gone up $5,000.

    Income at the left of the chart appears to be $59k.
    Income at the right of the chart appears to be $56k.
    Desire for symmetry aside, whence comes down $5k??

  2. Spadesofgrey

    Revisions to 2020-21 in the coming years will probably show overconsumption leading to GDP being abnormally high. Explains a lot. 2022 is the correction. The economy between mid-February -mid July did not grow.

  3. skeptonomist

    Seeing these numbers, or better the long-term view of disposable personal income

    https://fred.stlouisfed.org/graph/?g=Ukfz

    shows one very obvious reason why there has been inflation. But it's over now - nothing is going to be pumping money directly into the economy like this. Other contributors to inflation like supply-chain issues are also temporary. Inflation will still be dependent on gas/oil prices, which may be a killer in Europe, but actual inflation will not continue to be high just because oil and gas prices continue to be high. In the 70's and 80's inflation plunged when oil price quit rising - nominal price did not come down for a long time. Inflation is not high prices, it is the rise in prices.

    1. skeptonomist

      Not that high gasoline prices are not a problem, but if they stabilize at say $4 that will be the end of inflation from that source (after some work-through).

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