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by JumpCrisscross 300 days ago
> discretionary income is either stagnant in many sectors or are being chipped away from every angle: rent, healthcare, transport, childcare or leisure

This is false.

Real disposable personal income is higher today than any time before March 2020 [1]. Covid stimulus first dramatically raised (March '20 to '21) and then lowered (March '21 to June '22) that figure. But we hit a local maximum in April '25, after which real DPI started falling, though nevertheless only to the level we saw in spring '21 and early '25, and no point before.

(Real median household figures are more laggy. But they show the same trend [2]. On a national level, these figures are up.)

[1] https://fred.stlouisfed.org/series/DSPIC96

[2] https://fred.stlouisfed.org/series/MEHOINUSA672N
2 comments
Moomoomoo309 300 days ago
If you see how real disposable personal income is defined, it basically just says how much personal income in total there is - if 90% of it was in the hands of 1% of the people, it does not tell you that. It does not tell you a median either - it's just how big the pool is. Household incomes are up, but is that inflation adjusted, and how does that compare to cost of living? The conclusion you are coming to is not supported by the data you provided alone.
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JumpCrisscross 300 days ago
> Household incomes are up, but is that inflation adjusted

Yes. That’s what the “real” part communicates in economics data.

> how does that compare to cost of living? The conclusion you are coming to is not supported by the data you provided alone

If aggregate real personal disposable incomes are up, and real median household incomes are up, for real median household disposable incomes to be down requires an extreme increase in lower income households’ costs of living compared with higher incomes households’. (No, rising wealth wouldn’t fix that disparity because we’re measuring income and consumption, the former which exempts capital gains.)

Inflation effects are unevenly spread across households [1]. But the slope of the effect, at least as of ‘21, was insufficient to shift the median negative. What it probably was sufficient to do, especially by 2024, is shift somewhere between the lower decile to maybe quartile’s real disposable household income negative since ~2025 to 2018, when we last moderated interest rates. But not since the GFC.

TL; DR While OP’s statement is true of some households, and probably most households in the lower decile to quarter, it’s not true in general. (Caveat: it may be true if we include recent Medicaid and poverty-related cuts.)

[1] https://www.oecd.org/content/dam/oecd/en/publications/report...

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rchaud 300 days ago
Disposable income is income after taxes. Discretionary income, which is what I specified, is income that remains after the necessities of life have been paid for.
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JumpCrisscross 300 days ago
> Discretionary income, which is what I specified, is income that remains after the necessities of life have been paid for

You’re correct. See the personal savings rate [1]. If we observe the distribution, the lower quartile to third of households have no material savings [2].

[1] https://fred.stlouisfed.org/series/PSAVERT

[2] https://www.federalreserve.gov/publications/2025-economic-we...

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WillPostForFood 300 days ago
Discretionary income spiked during Covid giveaways, and declined during the inflation of 2021/2, but the trend line is up from 2015.

https://i.imgur.com/Dbf8yyU.png

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