July Real Disposable Income Per Capita Rose 0.31%

August 28, 2015 by

wall-street-etfDoug Short: With the release of today’s report on July Personal Incomes and Outlays we can now take a closer look at “Real” Disposable Personal Income Per Capita.

The first chart shows both the nominal per capita disposable income and the real (inflation-adjusted) equivalent since 2000. This indicator was significantly disrupted by the bizarre but predictable oscillation caused by 2012 year-end tax strategies in expectation of tax hikes in 2013.

The July nominal 0.39% month-over-month increase in disposable income drops to 0.31% when we adjust for inflation. The year-over-year metrics are 2.83% nominal and 2.52% real.

DPI per Capita since 2000

The BEA uses the average dollar value in 2009 for inflation adjustment. But the 2009 peg is arbitrary and unintuitive. For a more natural comparison, let’s compare the nominal and real growth in per capita disposable income since 2000. Do you recall what you were doing on New Year’s Eve at the turn of the millennium? Nominal disposable income is up 63.1% since then. But the real purchasing power of those dollars is up only 22.1%.

DPI per Capita Growth

Here is a closer look at the real series since 2007.

DPI Close-up

Year-Over-Year DPI Per Capita

Let’s take one more look at real DPI per capita, this time focusing on the year-over-year percent change since the beginning of this monthly series in 1959. The chart below highlights the value for the months when recessions start to help us evaluate the recession risk for the current level.

DPI per Capita Year-over-Year

Of the eight recessions since 1959, only three started with a YoY number higher than the current reading.

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July Real Disposable Income Per Capita Rose 0.31%

August 28, 2015 by

wall-street-etfDoug Short: With the release of today’s report on July Personal Incomes and Outlays we can now take a closer look at “Real” Disposable Personal Income Per Capita.

The first chart shows both the nominal per capita disposable income and the real (inflation-adjusted) equivalent since 2000. This indicator was significantly disrupted by the bizarre but predictable oscillation caused by 2012 year-end tax strategies in expectation of tax hikes in 2013.

The July nominal 0.39% month-over-month increase in disposable income drops to 0.31% when we adjust for inflation. The year-over-year metrics are 2.83% nominal and 2.52% real.

DPI per Capita since 2000

The BEA uses the average dollar value in 2009 for inflation adjustment. But the 2009 peg is arbitrary and unintuitive. For a more natural comparison, let’s compare the nominal and real growth in per capita disposable income since 2000. Do you recall what you were doing on New Year’s Eve at the turn of the millennium? Nominal disposable income is up 63.1% since then. But the real purchasing power of those dollars is up only 22.1%.

DPI per Capita Growth

Here is a closer look at the real series since 2007.

DPI Close-up

Year-Over-Year DPI Per Capita

Let’s take one more look at real DPI per capita, this time focusing on the year-over-year percent change since the beginning of this monthly series in 1959. The chart below highlights the value for the months when recessions start to help us evaluate the recession risk for the current level.

DPI per Capita Year-over-Year

Of the eight recessions since 1959, only three started with a YoY number higher than the current reading.

(…)Click here to continue reading the original ETFDailyNews.com article: July Real Disposable Income Per Capita Rose 0.31% [Dow Jones Industrial Average, SPDR S&P 500 ETF Trust]
You are viewing an abbreviated republication of ETF Daily News content. You can find full ETF Daily News articles on (www.etfdailynews.com)