March 2021 Real Income And Expenditures Significantly Improve
The data continues to be affected by the pandemic and the stimulus payments. Expenditures improved month-over-month (and is in expansion year-over-year) whilst income also improved month-over-month and is in expansion year-over-year.
Analyst Opinion of Personal Income and Expenditures
The note from the BEA says it all:
The estimate for March personal income and outlays was impacted by the continued government response to COVID-19. Economic impact payments associated with the American Rescue Plan Act of 2021 (which was enacted on March 11, 2021) were distributed in March. The full economic effects of the COVID-19 pandemic cannot be quantified in the personal income and outlays estimate because the impacts are generally embedded in source data and cannot be separately identified.
Econintersect s Economic Index forecast sees a modest slowing of the economic rate of growth as consumers do not yet seem to be prepared to spend. The media/government message machine is spinning the variants as a potential bomb reinforcing the message to consumers to save for the oncoming rainy day - even though the current rapidly expanding COVID vaccination program should be cause for a rosier message.
Please share this article - Go to the very top of the page, right-hand side for social media icons.
Analyst Summary of this Economic Forecast
The effectiveness of stimulus programs is significantly undermined when the economic brakes are not released. The last stimulus was banked by the majority, and the new stimulus being legislated currently will likely end up in the bank also. This is the main reason that this economic forecast showed a lower growth rate - poor consumer spending.
January 2021 Real Income Grew Due To Stimulus
The data continues to be affected by the pandemic. Expenditures improved month-over-month (but is in contraction year-over-year) whilst income improved month-over-month mostly due to the stimulus payments.
Analyst Opinion of Personal Income and Expenditures
The note from the BEA says it all:
The increase in personal income in January was more than accounted for by an increase in government social benefits to persons as payments were made to individuals from federal COVID-19 pandemic response programs. The increase in other benefits primarily reflected economic impact payments distributed through the CRRSA Act. Unemployment insurance also increased, reflecting an increase in pandemic unemployment compensation, including supplemental weekly payments to unemployment beneficiaries re-introduced by the CRRSA Act
Econintersect s Economic Index forecast continues to see a recovery underway from the pandemic induced recession - although the recovery continues to be modest and the economy remains weak. We see a marginally stronger economy in February. The coronavirus daily totals are declining - but the leaders at the CDC are worried that the South African / Brazilian variant may explode in February which would heavily impact the economy.
Please share this article - Go to the very top of the page, right-hand side for social media icons.
Analyst Summary of this Economic Forecast
In the case of our forecasting model, it was not designed to accurately forecast very swift movements - as our model averages to remove noise. That means the relative decline of the forecast index due to the coronavirus pandemic is understated as the decline was swift and the beginning of the recovery was swift. Analyzing the economic data, the real decline during the pandemic lockdown was much deeper than the Great Re
December 2020 Real Income Grew and Real Expenditures Declined
The data continues to be affected by the pandemic. Expenditures declined month-over-month (and is in contraction year-over-year) whilst income improved month-over-month (and is in expansion year-over-year).
Analyst Opinion of Personal Income and Expenditures
The note from the BEA says it all:
The December estimate for personal income and outlays was impacted by the response to the spread of COVID-19. Many provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act continued to wind down before the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act was enacted on December 27, 2020. Additionally, new restrictions and closures took effect in some areas of the United States. The full economic effects of the COVID-19 pandemic cannot be quantified in the personal income and outlays estimate because the impacts are generally embedded in source data and cannot be separately identified.