3.8 C
New York
Tuesday, February 7, 2023

Subscribe

Personal Income Saved by Unemployment Insurance

Here are Jake’s information-loaded charts showing that May’s increase in income reflects an increase in social benefit payments – unemployment benefits doubled in the last year.

Personal Income Saved by Unemployment Insurance

Courtesy of Jake at EconompicData

WSJ reports:

The income of Americans soared in May because of the government’s economic stimulus, leading them to increase spending modestly and boost the saving rate to the highest in 15 years.

Personal income rose at a seasonally adjusted rate of 1.4% compared to the month before, the Commerce Department said Friday. The jump reflected reduced taxes and increased social benefit payments unleashed by the stimulus package.

Up? Yes. Soared? No. Looking at year over year figures, personal income continues to show anemic (or in disposable personal income terms negative) growth.

personal income

Was stimulus the savior? Well, if you classify unemployment (and the extension of these benefits), then yes. The amount of unemployment benefits paid out has doubled in the past 12 months.

government unemployment insurance benefits

The chart below shows this more clearly. While personal income has stabilized, it has been due to unemployment benefits making up the shortfall in compensation.

personal income, fraction of personal income consisting of unemployment insurance
 
 
They key is what happens now. Unless benefits are extended again (and soon), these figures will turn negative unless you believe the broader economy picks up. There already have been negative signs as the exhaustion rate (i.e. those no longer able to collect benefits) has increased in recent months.
Source: BEA

 

Subscribe
Notify of
0 Comments
Inline Feedbacks
View all comments

Stay Connected

159,279FansLike
406,810FollowersFollow
2,160SubscribersSubscribe

Latest Articles

0
Would love your thoughts, please comment.x
()
x