Monday, March 2, 2009
Not all the news is bad. Despite the recession and despite all the layoffs, real personal income rose 1.2% in the 12 months ended January, and in the six months ended in January, real incomes rose at a pretty impressive 3.9% annual rate. To be sure, a good part of the rise in inflation-adjusted income has come from a decline in inflation (which in turn was mainly due to a big drop in energy prices), but the fact remains that real incomes are rising. This is consistent with the view I've held for awhile now that we've seen the worst of the bad news. Fewer people are working, but overall there are still an awful lot of people working in an increasingly productive fashion (since rising productivity is the only way for real incomes to rise).
Posted by Scott Grannis at 10:17 AM