In March 2021, real disposable income was $19,333,901 (millions of USD, SAAR). This was nearly 12% more than the next highest month of real disposable income in the history of the U.S. On its own, that is a staggering jump in income. Coupled with the fact that more than 16 million Americans are still filing unemployment claims, that 12% jump boggles the mind.

Compared with one year ago, real disposable income increased 29.3%. This was the fastest rate of month-over-month growth in disposable income since at least the mid-1960s. This was the only time that the month-over-month rate of growth was faster than 17%. In fact, only four times in history has the month-over-month rate of change grown faster than 10%, and all four times have happened since April 2020.

Unlike most other economic data points being reported right now, changes in real disposable income are not being affected by easy comparisons from one year ago when the economy was locked down. In fact, real disposable income in March 2020 was only 1.4% below the all-time high in disposable income.

The massive increase in disposable income is purely a result of record levels of government transfer payments. In March, government transfer payments, essentially unearned income, accounted for more than 30% of all disposable income. That was a record level of income coming from government transfer payments.

The annual rate of growth in real disposable income accelerated to 9.3% in March. This was almost triple the historic average growth rate and was the fastest rate of annual growth in history. Unless there is more stimulus, then real disposable income is likely near its peak rate of growth. And, without further stimulus to boost disposable income, it is likely that consumer spending will take a significant hit.