Source:  Real Time Economics



As the chart above shows, this is not an especially impressive recovery in terms of Real Disposable Income.

As we have discussed, this is not your typical post-recession recovery — it is a post credit-crisis recovery, and thats why metrics such as GDP,  Job creation, wages and even inflation remain sub-par.

(Not that this has anything to do with the equity markets!)

Category: Cycles, Wages & Income

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

8 Responses to “Income Growth This Cycle Is Unimpressive”

  1. GeorgeBurnsWasRight says:

    Gvien that the “Great Recession” was not a standard recession, are similar figures available for the slow recovery from the Depression?

    • idaman says:

      I’m thinking some unique data points this time around:
      1) slow employment growth = low income
      2) low interest rates = low investment income
      3) private sector deleveraging (it was a credit collapse after all) = excess cash used for paying down loans = less disposable income

  2. marmot says:

    interesting that each recovery is weaker than the last (with the exception of ’70 vs ’61)

    • wisegrowth says:

      My thinking says the cause is the slow decline of labor’s share of national income. Demand for finished goods just gets weaker and weaker as the years go by.

  3. Angryman1 says:

    Right, but it wasn’t the great depression either. Income growth isn’t what powers the system now anyway. It is the ability to expand “extra” income via company wealth.

    The Great US growth story that sprung from the 29-33 contraction is over. GDP per capita absolutely exploded after that event and we just can’t grow that fast anymore, hence income growth can’t grow that fast without a “outside” interference such as labor unions, which might cause bad things in other areas.

    But notice, the US is still growing, still doing its stuff, still living. I think people need to accept the restraints and hope the capitalists can modify the modes of production again.

    • willid3 says:

      sure we can. but we wont since we seem to be fixated on allowing income growth only for 1% only. the rest of us are just out of luck

  4. godot10 says:

    Who needs direct real disposable income growth?

    QE –> Asset price inflation –> 1% get richer –> 1% spend a bit more, while buying more assets –> provides just enough economic growth to keep the 99% from starting a revolution.

    The Fed should be rebuilding American infrastructure, rather than subsidizing the financial fraudsters.

    Instead of QE, use the $85 billion a month to set up an infrastructure bank to fund the rebuilding of America, and get paid back through tolls and user fees.

    So instead of inflating financial asset prices, the country would have bridges, a modern electricity grids, functioning airports, high speed trains criss-crossing the continent, and rapid transit in American cities.