Disposable Income Growth Slows to a More Normal Rate
Real disposable income was 8% below January’s level. However, it was still higher than the disposable income for any month since July 2020.
In February, real disposable income was $17,678,172 (millions of USD, SAAR). This was 8% below January’s income. Of course, the large drop in February from January was due to the stimulus payments in January. However, it was still higher than the disposable income for any month since July 2020. Compared with one year ago, disposable income increased 3.4%, which was slightly more than the historical average month-over-month growth.
The annual rate of growth in real disposable income accelerated to 6.9% in February. This was more than double the historic average growth rate and was the fastest rate of annual growth since October 1973. Unless there is more stimulus, then real disposable income is likely near its peak rate of growth.