Personal income increased $116.6 billion (0.6 percent) in December according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $111.6 billion (0.6 percent) and personal consumption expenditures (PCE) decreased $27.9 billion (0.2 percent). Real DPI increased 0.2 percent in December and Real PCE decreased 0.6 percent. The PCE price index increased 0.4 percent. Excluding food and energy, the PCE price index increased 0.3 percent.And much of that increase in income was due to government payments, and not a boost in wages and salaries. This includes $48.3 billion (annual basis) in newly enhanced unemployment benefits and $44.4 billion in additional payments to hospitals and other health care providers under the CARES program. As you can see, wages and salaries have still not gotten back to the levels they were at before the COVID World seeped in, and unemployment benefits remain elevated, going back on the rise in December. the COVID recession of the Spring may be over, with Q4 reporting 4.0% (annualized) growth this week, you need to remember that this is an AVERAGE rate across 3 months. It is clear that the economy stalled out and may have declined in December, and with the virus still rampaging in much of America and travel still limited, there is little to believe that it got much better in the first month of 2021. And as you can see, we are still not back to the economic activity we had at the start of 2020, which is why more stimulus/stabilization is needed, and quickly.
Saturday, January 30, 2021
Income, spending numbers give more proof of skidding economy at end of 2020
We already had plenty of proof that there was an economic slowdown happening at the end of 2020, but Friday’s income and spending report gave extra confirmation that things took a step back in December.
Posted by Jake formerly of the LP at 8:43:00 AM