Did Americans' Income Really Rise in March?

[n2doc]

DANIEL INDIVIGLIO -

American workers got a paltry raise in March. The headlines will tell you: personal income increased 0.5% last month. After all, that's what the Bureau of Economic Analysis reports. But is the news really as good as it looks? Digging deeper shows that the income growth wasn't so spectacular.

First, here's the historical chart for the change in income, disposable income, and spending:




March marks the sixth straight month incomes have risen. Spending rose by 0.6% last month, a little less of an increase than the 0.9% jump in February. Since September you can kind of see these lines move up together in a somewhat linear fashion. That appears to be a nice trend, since more income and spending should help to feed the recovery

But looking deeper into March's numbers reveals that the 0.5% income jump wasn't as good as it looks. Income increased at an annualized rate of $67 billion. Of that, $25 billion consisted of government handouts, in the form transfer payments such as Social Security and unemployment benefits. So the government accounted for more than one-third of the growth in personal income last month. That's the biggest boost transfer payments have provided since August.

To make matters even worse, if you take inflation into account, disposable income barely increased at all. Using chained 2005 dollars, disposable income rose by just 0.1% in March, after flat growth in February. Here's a chart comparing disposable income with and without inflation:


more

http://www.theatlantic.com/business/archive/2011/04/did-americans-income-really-rise-in-march/238042/

[JohnnyRingo]

1. Mine did.

I found two quarters and a nickel down in the seat of my car last week.

As for those charts, I guess they can be manipulated to accent any desired result. They can dis include huge blocks because they are unemployed and no longer looking for work, or assume all eBay sales are income. I'm not so sure Americans are earning more at all.

[valerief]

2. I'm sure the U.S. billionaires' income did. nt

[abelenkpe]

3. mine didn't

And more of what I do make went to rising fuel costs so yeah...

It's nice outside tho :)