Monday, April 30, 2012

Personal Income and Outlays... A Few Charts

The Economic Populist notes:

While disposable income increased by 0.4%, when adjusted for inflation, disposable income was actually a 0.2% increase.
Over the longer term and on a real per capita basis, March marked the third month in a row in which disposable personal income printed a negative year over year figure, which shows just how how weak the employment recovery has been.

On the flip side of the income / consumption equation, has been solid spending (both in nominal and real terms), as consumers have reduced their savings rate below 4% (the savings rate had moved above 6% during the beginning of the crisis).

One area of real consumption weakness... energy in real terms. I am no expert as to specifics of what is making up the decreased demand (clean technology, less people driving to work, more people taking public transportation, etc...), but I will say that demand does tend to decrease when the price of good or service quadruples like energy has in recent years.

Source: BEA


  1. The decline in energy spending is driven by decade low (nominal) prices for natural gas. Natural gas is the fuel used by a sizeable portion of country for winter heating and is also the most important determinant of electric power prices. Couple large price declines with the warmest winter on record and you get way, way lower energy spending.

  2. The chart shows real energy consumption, not nominal. Lower prices would likely mean more (not less) real use, while warm weather could potentially explain a recent decline, not sure what explains the five year trend.