Friday, March 28, 2008

Personal Income post small increase in February 2008

The U.S. Department of Commerce released the Personal Income figures for February 2008 today.

Real Personal Income increased by 0.28% and Real Disposable Income increased by 0.35% in February from January 2008. Compared to last February 2008, Real Personal Income has only increased by 0.30% and Real Disposable Income has increased by 1.25%.

Personal Income often falls during recessions (although it rose in the recessions of 1970 and 1982). The chart on the right shows the year over year changes in personal income. The monthly data is volatile. Using a 12 month average smoothes out the data.


This next chart compares the 12 month average of the changes in Personal Income with the Unemployment rate. The unemployment rate consistently spikes up during recessions. So far the current unemployment rate has risen a little bit consistent with the early stages of recessions. After recessions the unemployment rate and personal income reverse course around the same time. If we continue down the recession path, I expect the unemployment rate to spike up and Personal Income to most likely trend downwards.

Digg my article

Sphere: Related Content

No comments: