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The Impact of Three Rounds of Fiscal Stimulus is Waning Already

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12 comments on The Impact of Three Rounds of Fiscal Stimulus is Waning Already

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In my previous post, Real Personal Income Declines 1.6% in September, I noted real (inflation adjusted) income was down 1.6%.

The lead chart in this post shows a breakdown of nominal income. 

Fiscal Stimulus

Three rounds of fiscal stimulus clearly stand out. 

Personal Current Transfer Receipts (PCTR) includes things like the SNAP (food stamp program) but also pandemic aid checks under both Trump and Biden.

  • Personal Income excluding PCTR was $16,580 billion in September of 2021 vs $15,798 billion in February of 2020 pre-pandemic. 
  • PCTR  was $3,913 billion in September vs. $3,208 billion in February of 2020.
  • PCTR Other was $894 billion in September vs. $506 billion in February of 2020.

Fiscal stimulus is still ongoing, but waning. That stimulus and the wealth impact from the stock market is what kept consumers spending.

Meanwhile, the economy is slowing, mortgage rates rising, and tax hikes are on the way. 

For discussion of the current picture, please see MishTalk TV Episode #3: Lacy Hunt Still Bullish on Treasuries.

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Mike Shedlock

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12 Comments
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Jojo
Jojo
4 years ago
I want mo’ money!
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Tony Bennett
Tony Bennett
4 years ago
Today’s LOL brought to by Village Idi… er, Treasury Secretary Yellen:
Treasury Secretary https://www.cnbc.com/janet-yellen/ asserted Friday that the administration’s infrastructure spending proposal will lower inflation by reducing costs vital to households.
“It will boost the economy’s potential to grow, the economy’s supply potential, which tends to push inflation down, not up,” she said. “For many American families experiencing inflation, seeing the prices of gas and other things that they buy rise, what this package will do is lower some of the most important costs, what they pay for health care, for child care. It’s anti-inflationary in that sense as well.”
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Tony Bennett
Tony Bennett
4 years ago
“The Impact of Three Rounds of Fiscal Stimulus is Waning Already”
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The yield curve flattening today … again … concurs.
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Bungalow Bill
Bungalow Bill
4 years ago
At least we learned that Republicans love the redistribution of wealth just like the Democrats do. Bernie Sanders only could dream of having his name on the easy money government stimulus checks Trump demanded his name be placed on. Socialist and socialist lite political parties…
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goldguy
goldguy
4 years ago
Only a matter of time before we get another stimulus.  One of the only ways we can get some GDP in the future.  Pathetic state of affairs. Go Brandon…
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Bungalow Bill
Bungalow Bill
4 years ago
Reply to  goldguy
More stimulus would just be continuing Trump’s policies that he originally demanded, wouldn’t it? Go Brandon? When do we start saying F Trump for pushing this policy to begin with?
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Captain Ahab
Captain Ahab
4 years ago
Reply to  Bungalow Bill
For a great many people who do not have enough income to actually save, the ‘stimulus’ was a life saver. Beyond that, the stimulus was wasted, the same as any non-essential welfare payment. The same is true of the corporate welfare programs/ loan programs etc. That said, hindsight is always 20/20. No one knew (as in having a high degree of certainty) the severity, or lack thereof of the covid virus, and the effect it would have,
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RonJ
RonJ
4 years ago
Reply to  Captain Ahab
The Diamond Princess was an early covid-19 laboratory. Fairly early on, in New York State, Dr. Zelenko assembled an early treatment regimen for CV-19, which kept all but 4 of 400 of his high risk patients out of the hospital.
At the very beginning, nobody knew, but if science and medical intervention been followed, instead of a predetermined public health agency agenda, the virus would have been seen as manageable not long after Zelenko’s protocol became public knowledge and supplies to treat CV-19 were ramped up. After Zelenko’s discovery, it wasn’t an accident what happened to his treatment regimen. The FDA’s EUA, which limited HCQ to in hospital use only. The FAKE study that was published in Lancet. The sabotaged Oxford study, which didn’t mimic the Zelenko protocol and gave a toxic dose to study participants. It was all designed to suppress a viable early treatment for Covid-19. All other viable early treatments that followed were suppressed, as well.
A lot of people died due to public health agency corruption, as opposed to Covid-19, as it was treatable. That lead to the the extreme disruption of the U.S. and world economy and everything that followed on because of it. Renters shouldn’t be facing eviction and landlords shouldn’t be facing foreclosure. The supply chain shouldn’t be all screwed up, as it is. There shouldn’t have been a record number of over dose deaths and how ever many other etc’s that one can think of.
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dbannist
dbannist
4 years ago
There is almost a 4th wave of stimulus:
HOPE rent payments.

THey were increased because they could not give the money away.

Almost all my low income renters, which is all of them, are now getting free rent for a whole year, courtesy of the HOPE program.  I’m sure it will run out of money first, and then some poor renter will be put forth by the progressives as a poster child of hopelessness and despair.  Then, a strong push forth funding it more.

Anyway, HOPE is rapidly expanding their coverage to low income renters at the moment and will undoubtedly extend the life of the stimulus.

Giving everyone 500-1000 in free rent a month for a year is quite the stimulus.

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Christoball
Christoball
4 years ago
Reply to  dbannist
This has been going on with section 8 housing for a long time. It subsidizes landlords who would otherwise not be able to rent their units at the current price. The rental market depends on subsidies. It is as much to keep landlords solvent as it is to keep renters solvent.
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dbannist
dbannist
4 years ago
Reply to  Christoball
Sec 8 benefits some landlords but not many.
Section 8 requiresd a unit to be habitable (not beautiful) and offers rents that are market value to homes that otherwise would not be because of looks.

It goes the other way for nice units….landlords don’t want section 8 if they have a nicer place because the rents are market value, but the unit may command premium rates over market value.

STill, guaranteed rent helped a lot of landlords in 2020-2021 when many landlords couldn’t evict.  If you have sec 8 renters you at least got partial rent.

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Christoball
Christoball
4 years ago
Reply to  dbannist
I was referring to how section 8 distorts the overall market. The points you make are correct on an individual level, but on a macro level all rents are higher because the market has been distorted by section 8.
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