(that's after adjusting for inflation)
(no paywall, its an msn.com link -Progree)
The most concerning thing about Thursdays report on U.S. gross domestic product for the first quarter wasnt that the first line of the first table showed that real GDP fell at a 1.4% annual rate. It was the little-noticed news on line 34 showing that real disposable incomes fell for a fourth straight quarter.
Over the last four quarters, the purchasing power of after-tax household incomes plunged by $2.2 trillion (in 2021 dollars). Thats a 10.9% decline, by far the largest in the records dating back to 1947.
Of course, the decline in incomes is merely the unwinding of the massive support that households received from the government in 2020 and 2021 via direct pandemic stimulus payments, the child tax credit, and enhanced benefits for unemployment insurance, food stamps and Medicaid, and more.
. . . But the Fed is determined to quash demand. Thats what raising interest rates is all about: Slowing demand in an overheated economy by raising the costs of borrowing. ((the article argues that quashing demand when inflation-adjusted incomes are falling like this is only going to make incomes fall more -Progree))
. . . The prospect for stagflationlow growth with high inflationis real. The appropriate solution to inflation would be to work to alleviate supply-side constraints, say Nersisyan and Wray. To do that, unfortunately, we need more domestic investment, not less.
The Personal Income Report he is referring to is at:
The full release with all the tables is at: https://www.bea.gov/sites/default/files/2022-04/pi0322.pdf
I can't find the Line 34 data he is talking about. But in Line 46 of Table 2 of pi0322.pdf, it has
Disposable Personal Income, Total, billions of chained (2012) dollars: quarterly,
2020 Q4: 15,443.0, 2021 Q1: 17,221.6, Q2: 15,805.6, Q3: 15,640.0, Q4: 15,418.0, 2022 Q1: 15,339.2
And yes, there are 4 straight quarters of decline, and 2022 Q1 over 2021 Q1 is a 10.9% decline:
(2022 Q1 / 2021 Q1 - 1) * 100% : (15,339.2 / 17,221.6 - 1) * 100 = -10.93%
Table 2 Line 22 "Government social benefits to persons" shows a huge amount in 2021 Q1 relative to the preceding and following quarters.
Future such comparions of quarterly real disposable income vs. the same quarter a year ago will likely be much less dramatic declines, with the unusual 2021 Q1 falling out of the comparison. For example, comparing 2022 Q1 to 2021 Q2 (that's the last 3 quarters) is
(2022 Q1 / 2021 Q2 - 1) * 100% : (15,339.2 / 15,805.6 - 1) * 100 = -2.95% (-3.91% annualized)
2022 Q1 vs. 2021 Q4 (one quarter) is a 0.51% decline (-2.07% annualized)
but its still in the wrong direction, just not so apocalyptic.
Edited to add the personal savings rate graph below (#7)
in WCCO's news archives, the CBS affiliate. They were researching the 1970 Minneapolis school strike, and guess what -- they asked this young boy about his views on the school strike. Cross-posted to GD
start at about 1:09
Edited to Add:
Crickets in the GD forum added this:
I couldn't get the video to play at your link, but I found one on YouTube. At time of posting, there are two here: https://www.youtube.com/results?search_query=Film+Of+Prince+At+Age+11+
Here's one of them - skip to 1:34 for Prince and his childhood friends at 3:42:
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