The GDP report this morning was OK, but the BEA also released its estimate of personal income today. Adjusted for inflation, it increased at an annualized rate of 1.0% in Q2. Since the start of the pandemic it's up a total of 0.9%:
Not so great. Inflation numbers come out tomorrow.
I THINK this graphic is a good insight into why, despite lots of positive economic numbers, the Biden economy is not as popular as one might guess.
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I see stuff like this and get mad thinking about all the wage inflation fearmongering & how it was critical we make sure that didn't happen. Mission Accomplished, I guess.
Inflation is the villain. Inflation is what ate away at personal income throughout 2021. The Fed didn't start hiking rates until 2022.
The rate hikes have not kicked in yet (apart from the effect on mortgages), although they may well do so, especially if the Fed keeps raising. If there is a recession it will probably not cause nominal wages to go down much - wages are known to be sticky downward, and they have also been sticky upward, that is have not kept up with inflation. But increasing unemployment in a recession will reduce total or average personal income.
It would be interesting to see those numbers by income level.
For example, we talk about the 1% and their wealth, but it's sort of a meaningless number until you realize how much it dwarfs everyone else, especially the bottom 50%.