Personal Income Soars Over 21% on Third Round of Free Money

Mish

Thanks to the third round of Covid-19 stimulus, personal income hit a new record high.

Personal Income Jumps Thanks to Free Money

The BEA's Personal Income and Outlays report for March 2021 shows a new record high in personal income.

Numbers in the chart are in billions of dollars at Seasonally-Adjusted Annualized Rates (SAAR).

Key Details 

  • Personal income increased $4.21 trillion (21.1 percent) in March.
  • Disposable personal income (DPI) increased $4.18 trillion (23.6 percent)
  • Personal consumption expenditures (PCE) increased $616.0 billion (4.2 percent).
  • Real DPI increased 23.0 percent in March and Real PCE increased 3.6 percent; goods increased 7.3 percent and services increased 1.7 percent 
  • Personal outlays increased $616.4 billion in March.
  • Personal saving was $6.04 trillion in March and the personal saving rate—personal saving as a percentage of disposable personal income—was 27.6 percent.
  • The PCE price index increased 0.5 percent. 
  • Excluding food and energy, the PCE price index increased 0.4 percent. 

PCE, Income, Transfer Receipts 2006-Present

PCE, Personal Income, personal PCTR 2021-03

Transfer Payments (PCTR)

The charts show three recent spikes in Personal Current Transfer Receipts (PCTR).

Transfer payments are free money or money equivalents from the Federal government. 

The category includes food stamps, a relatively stable transfer payment, and Covid stimulus items (one time and ongoing).

There was a "one time" leap in March of 2020 and another "one time" jump in January of 2021. 

Biden sought and got a third round of stimulus that is now reflected in the charts. 

Personal Income Excluding PCTR

Personal income excluding PCTR is barely above the pre-pandemic level. The rest is free money.

Mish

Comments (8)
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Mish
Mish

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njbr
njbr

And the reason for the spike in personal income...is another spike...

...Results from a new cell study suggest that the SARS-CoV-2 spike protein can bring about long-term gene expression changes. The findings could help explain why some COVID-19 patients -- referred to as COVID long-haulers -- experience symptoms such as shortness of breath and dizziness long after clearing the infection.

SARS-CoV-2, the virus that causes COVID-19, is covered in tiny spike proteins. During infection, the spike proteins bind with receptors on cells in our body, starting a process that allows the virus to release its genetic material into the inside of the healthy cell.

"We found that exposure to the SARS-CoV-2 spike protein alone was enough to change baseline gene expression in airway cells," said Nicholas Evans, a master's student in the laboratory of Sharilyn Almodovar, PhD, at the Texas Tech University Health Sciences Center. "This suggests that symptoms seen in patients may initially result from the spike protein interacting with the cells directly."

Evans will present the research at the American Society for Biochemistry and Molecular Biology annual meeting during the virtual Experimental Biology (EB) 2021 meeting, to be held April 27-30....

anoop
anoop

How long before UBI?

TexasTim65
TexasTim65

Mish, one thing that never gets talked about anywhere is that all this free money must be increasing the wealth gap/disparity.

Even though the money may be dumped to the lower income people they have almost no means to keep it (ie invest in productive assets) unless they buy stocks/crypto/real estate with it because even saving it loses 3% to inflation.

So what happens is that they spend it on whatever goods/services they want and the money ultimately flows to those with ownership (rich/super rich) of those productive assets (companies/land lords). The value of those goods/services they buy declines immediately (either used up when service is finished or depreciates if you buy goods like a car/clothes/furniture or whatever) and reaches zero quite soon. So the owners of the assets end up with all the money so they get richer and thus the wealth gap/disparity gets larger than ever.

If you want an analogy, think of the population as a glass of water (poor at top, rich at bottom) and imagine adding a spoonful of sugar (money) to the water and stirring. The first one mixes fairly nicely though some sugar (money) will sink to the bottom (rich). That's what the economy was like with sound money (gold). But now with the fed printing since going off the gold standard we are adding more and more sugar and this stimulus is just 1 giant spoonful. Once the water is saturated all the extra sugar added just sinks directly to the bottom after a brief interlude. That's what happening with the stimmy money.

PecuniaNonOlet
PecuniaNonOlet

While income may be up there is a huge growing problem no one seems to be discussing. Supply chains seem to be breaking down more and more. I went to a car dealership since I finally decided to buy a car and the sales guy told me they were expecting a huge reduction of incoming cars due to supply issues.

Contractors have told me all materials are through the roof and there is a backlog. A co-worker told me they were on a six to infinity week hold for Cisco switches because covid producers (big pharma) got first dibs on all incoming equipment.

I could go on but whats the point. Stuff that does exisit in the supply chain is being prioritized to certain companies and everything else ends up costing 2x, 3x, etc.

Not sure why most commenters here arent aware, how are you guys so detached from supply chains? And dont get me started on the labor market!

johnlead
johnlead

Thanks for the wonderful share. Your article has proved your hard work and experience you have got in this field. Brilliant. I love it reading. This is so helpful. Save us a lot of time. Nice!


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