A little breakdown on Personal Income growth.


The top redline is our primary line of interest. This is wage and salary disbursements of private industries.

As we can see they are now growing smartly and indeed are well above their pre-recession peak, 5670B vs. 5484B for growth of 186B

Small business income in blue, completed most of its bounce back about 18 months ago – somewhat startling to me it was the first to recover.

However, growth since then has been slow, though growth before the recession was slow as well. The peak month for small business income was December 2006. This is likely because so many small businesses are construction firms. I have looked at the breakdown but I am guessing small business income is split between restaurants and contractors. If that’s true it would be consistent with the notion that resterauntuers are doing well but the contractors haven’t recovered from the bust in 2005.

The light green line is government transfers. This is providing the strongest contraction in personal income. Government transfer payments peaked on December 2010 declining by about 30B to November 2011, though there was a bounce back in December 2011.

Wages and salaries for government employees peaked in May of 2010 and have declined about 10B since then.

The biggest story of the period is in rental income. Rental income hit its nadir in February of 2007 at 120B and has staged and astounding roar back. Its been growing pretty much non-stop since then hitting 437B for a total growth of 317B. Of course, that’s over a fairly long period.

Since private wages and salaries hit their bottom in March of 2009 they have grown by about 600B. Over the same period rental income has grown about 155B. However, remember that in 2007 total rental income was only 120B.

One of the really fascinating things is comparing the recovery in private wages and salaries can much faster than after the 2000 recession. It took 2 years and3 months for private wages and salaries to beat their peak after the 2000 recession.

In contrast it took about 3 years and 4 months for private wages to reach their early 2008 peak.

Interestingly though, if you look at the post Lehman drop-off that began in October of 2008 and lasted until March of 2009, that was most of the lost in private wages. It took roughly 2 years and 4 months to make back that decline. That’s roughly the exact same time frame as the 2000 recession despite radically different shapes.

It looks like the “recession within a recession” was actually fairly V-shaped in terms of private wages and salaries.