- by New Deal democrat
This morning's release of personal income and outlays for November pretty much puts the last nail in the coffin for those Doomers who have been claiming we would go into recession in 2015. Beyond that, "real personal disposable income per capita" is a good enough measure of general middle class well-being that it is the economic metric in Prof. Douglas HIbbs' "Bread and Peace" model of Presidential election outcomes. Let's take a long-term look.
First, here is real disposable personal income per capita from 1959 - present, in log scale best to show the actual trend:
You can see the big increase was in the 1960-73 boom. The trend moderated from 1974-2006, and appears much flatter since. Unsurprisingly, this shows that it has been harder and harder for Americans of each successive generation to make progress.
Now let's take a look at the same metric measured YoY. As of November 2015, the YoY% gain in real disposable personal income per capita was 2.72%, so the graph subtracts that so that equivalent YoY gains show at the "0" line [Note that the big reversal in 2012-13 was due to the temporary 2% decrease in Social Security withholding]:
While the present gains aren't fantastic, they aren't too shabby either. Outside of the 1960-73 era, the only times that there were sustained significantly better YoY gains were several boom years in the 1980s and late 1990s. I hasten to add that the gains in the last year have primarily been due to the big declines in gas prices, rather than a surge in nominal income.
P.S.: If current trends continue, Hibb's model forecasts a win for the Democratic Party nominee in next year's Presidential election.