Household Income & Spending Increases
U.S. household income and spending increased to start the year according to the Bureau of Economic Analysis (BEA)
– Personal income increased $1.9 trillion to 21.45 trillion a 10% jump from December 2020.
– Personal outlays increased $348.7 billion to 15.3 trillion a 2.3% increase from December 2020.
The increase in income was mostly the result of an increase in government benefits to persons as payments were made to individuals from federal stimulus programs.
Personal savings saw the biggest jump in this latest report. Personal was up a whopping 70% from December to 3.9 trillion which represents a 20% saving rate.
Income is up and savings is up. This is why so many economists are projecting an explosion in 2021. As I reported yesterday, Pimco, one of the world’s largest fixed-income managers, said in a research note, “that the additional stimulus could contribute to 2021 real GDP growth of over 7%…the great inflationary episode of the 1970s-1980s.”