Real Spending Power Grew Twice The Rate Of The Last Expansion
The average American's real spending power rose in 2018 at nearly twice the pace of the last economic expansion, according to data released on Friday by the Bureau of Economic Analysis.
Real disposable personal income per capita in the 12 months through December 2018 rose by 3.5% over the 12-months of 2017, compared with a compound annual growth rate of 1.8% in the five-year economic expansion that ended in July 2007 — the credit-fueled boom preceding the world financial crisis.
The trendline is a key component in future growth, since 70% of U.S. economic activity is consumer-driven. With spending power running nearly twice the rate of growth of the last expansion, an economic downturn anytime soon seems unlikely.
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