Real Spending Power Grew Twice The Rate Of The Last Expansion
Published Friday, March 1, 2019 at: 7:00 AM EST
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.
The Standard & Poor's 500 stock index closed at 2,803.69 on Friday, up from 2,792.67 last Friday. It was the fifth straight weekly gain for this broad benchmark of U.S. public equities, and the index edged closer to its all-time closing high on September 20th, 2018.
A key growth investment in a broadly diversified portfolio, the S&P 500 index is volatile, unpredictable, and suffered a 19.8% plunge from September 20th's all-time closing high to the Christmas Eve closing low of 2,351.10, and then began its current rebound.
This article was written by a veteran financial journalist based on data compiled and analyzed by independent economist, Fritz Meyer. While these are sources we believe to be reliable, the information is not intended to be used as financial or tax advice without consulting a professional about your personal situation. Tax laws are subject to change. Indices are unmanaged and not available for direct investment. Investments with higher return potential carry greater risk for loss. Past performance is not an indicator of your future results.
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