US incomes in Biden-Harris era better than we knew. We are in great shape today vs Trump years

Friday had the release of the always-important income and spending reports. And the numbers for August looked good all around.

JUST IN: The PCE inflation gauge came in at 2.2% (y/y) in August --> the lowest since February 2021 and very closet to the Fed's 2% target.

PCE excluding energy & food = 2.7%. That ticked up a smidge (as expected) and will be watched closely.

But overall, we continue to see… pic.twitter.com/ou7r52j7Ay

— Heather Long (@byHeatherLong) September 27, 2024

Not only was both types of inflation in the report still in check (and heading downward) in the Summer of 2024, but real disposable incomes continued to rise, and spending continued to increase at a solid level for August, It portends good Q3 growth numbers for the economy as a whole.

But maybe the most remarkable part of this report wasn’t in what was happening in August 2024, but in what we found out about what happened earlier this year, and in the time period of the entire Biden-Harris Administration.

Today’s release presents results from the annual update of the National Economic Accounts. The revisions for income and consumer spending estimates begin with January 2019. Monthly estimates for January through March of 2024 include revisions resulting from the incorporation of first-quarter wage and salary data from the Bureau of Labor Statistics (BLS) Quarterly Census of Employment and Wages program. Estimates for wages and salaries for April through July of 2024 have been updated to reflect revised monthly data from the BLS Current Employment Statistics program.

Much like where we saw in Thursday’s report, it showed that the economy in the first 3 years of the Biden-Harris Administration were even better than we knew of. That’s especially true when looking at real disposable incomes starting in the middle of 2022, and especially wages and salaries at the end of 2023 and in early 2024.

That’s a significant difference, with inflation-adjusted disposable income per capita nearly $2,000 higher than we thought it was. It also shows that real disposable income per capita restored its 2021 non-stimmy-check highs at the start of 2023, and has beaten inflation by more than 3.5% in the 18 months. This change means that the savings rate wasn’t under 4% for most of 2023, but instead was mostly over 5%, which makes for a more balanced and healthy economy, and means perhaps American consumers aren't as close to the edge as the earlier data indicated.

Yes, people are annoyed by higher prices, but they have the incomes to handle it, and a large portion of Americans are making more at their jobs than they did 4 and 5 years ago, even after inflation. UMass economist Arin Rube points out how everyday line workers have had larger gains since the start of 2020, and are seeing their inflation-adjusted incomes continue to beat the 21st Century trend.

So when the Trump campaign tells Americans they’re suffering under “inflation” and “hard times”, they’re trying to incept something that doesn’t match the situation that people are living through in September 2024. And like a lot of this election, it seems like the result will heavily correlate to whether you base things on what MAGA wants you to believe, or if you believe in the things that are actually happening.