Real Disposable Income Rises in March


Personal Income was up by 0.2% in March after a 0.3% increase in February, according to the most recent data release from the Bureau of Economic Analysis. Disposable personal income, income remaining after deducting personal income taxes, grew strongly by 0.5% in real terms.

Personal consumption expenditures, while stayed flat in nominal terms for two consecutive months, rose 0.3% after accounting for inflation. Meanwhile, the savings rate increased to 5.9%, up from 5.7% in January. The savings rate declined through the second half of 2016, but was on an upward trend from the beginning of 2017. The savings rate rose with the onset of the Great Recession as households repaired their balance sheets. However, this process of deleveraging held back GDP growth due to reduced consumption.

Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: