1.9% Income Growth from 2015 Required to Keep Up in Slowly Growing U.S. Economy
Wednesday October 5, 2016

Based upon last week’s third estimate of Q2 2016 GDP by the Bureau of Economic Analysis, StayingEven.com’s Q1 estimate of the Staying Even Index (SEI) came in at 1.9%, slightly up from the 1.8% reported based upon the second estimate of GDP growth released last month. This reading is significantly higher than the reported 1.1% increase in the consumer price index (CPI) compared to the year ago period, demonstrating that wages that increase with inflation/COLA are not sufficient to keep up in the growing U.S. economy. The 1.9% increase in the Staying Even Index (SEI) is based upon reported YTD Q2 year-over-year nominal GDP growth of 2.7% and population growth of 0.8%.

These projections suggest that individuals whose YTD Q2 2016 total income from all sources grew by more than 1.9% from the same period in 2015 expanded their adjusted share of the U.S. economy, and those whose total income grew by less than this fell behind compared to the prior year. As previously released, SEI growth for calendar year 2015 was 2.9%. The 2016 slowdown in SEI growth reflects slower productivity and GDP growth as the economy remains sluggish. If this trend continues during the back half of the year, 2016 SEI growth will be the slowest since 2009.

StayingEven.com will publish updates to these figures as GDP and population estimates are revised over the coming months and as future quarter GDP estimates are released. We are dedicated to helping individuals understand what income growth is required to keep up in the U.S. Economy.

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