Several commentators have been perplexed as to why voters feel that economically distressed despite the positive data points about the macro economy. This chart from the Federal Reserve helps to explain why voters are less sanguine about the economy:

Selected Component Shares of National Income
profits_vs_labor
Source: St. Louis Federal Reserve

In a recent publication detailing national economic trends, the St. Louis Fed shows that while profitability has been trending strongly upwards, compensation has been going the opposite direction. Compensation is now at 25-year lows. That spread explains the phenomena of how the economy can improve while people feel worse off about their own economic situation.

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Quote of the Day:
“Rather to fail with honor than to succeed with fraud.”
-Sophocles

Category: Finance

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One Response to “Chart of the Week: Selected Component Shares of National Income”

  1. Read It Here First: NYT on Inflation, Personal Income and Corporate Profits

    Today’s NYT has an article on Inflation, Wages, Income and Corporate Profits. We first started running a chart depicting the same issue way back in May 2004, and have featured it several times since. Selected Component Shares of National Incomeclick fo…