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Real Disposable Income Grows 0.2% in August
Real disposable income grew month-over-month for the first time since March. However, this was not enough to change the decelerating growth trend in the annual rate of change, which is indicating that consumer spending will hit its peak rate of growth in late 2021 or early 2022.
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In August 2021, real disposable income was $15,581,892 (millions of USD, SAAR). This was up just 0.2% from one year ago, although it was the first month of month-over-month growth since March. Extended unemployment benefits will roll off disposable income next month. This could have a negative impact on disposable income as many people are slow to return back to work.
The annual rate of growth in real disposable income decelerated to 3.5% in August. This was slightly more than the historic average growth rate and the slowest rate of growth since April 2020. The decelerating growth in real disposable income is likely to cause a peak in real consumer spending in the second half of 2021.
