Disposable Income Gets Revised for April

April disposable income grew at the second slowest rate since February 2017.

In April 2019, real disposable income was $14,575 billion, an increase of 2.2% compared with one year ago. That was the second slowest rate of income growth since February 2017 (only last month was slower). In addition to the slowing rate of growth – dropping from its peak of 3.6% in December 2017 – the previous five months of disposable income generally was revised lower. Typically, real disposable income sets an all-time high almost every single month, but April’s income level was lower than February 2018 and December 2017. 

The annual rate of growth was unchanged at 2.7%, but it was down from 2.8% growth in December through February. The annual rate of growth has been consistent at either 2.7% or 2.8% since January 2018. With March and April’s much slower growth, it is likely that the annual rate of growth in disposable income will decelerate more in the months ahead.

Keep in mind that changes in real disposable income typically leads capital equipment consumption by almost 24 months.

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