The great news for the U.S. economy continues. After positive numbers first for retail sales in March and later on GDP in April, the government released a report at the end of April showing that personal incomes have risen as well.
Personal income increased $4.21 trillion (21.1 percent) in March, the Bureau of Economic Advisors (BEA) said in an April 30 report. In addition, the report said, “disposable personal income (DPI) increased $4.18 trillion (23.6 percent) and personal consumption expenditures (PCE) increased $616.0 billion (4.2 percent).”
The 21.1 percent increase was a record for that particular measure, even after personal income dropped in February.
“The 21.1% March surge in income was the largest monthly increase for government records tracing back to 1959, largely reflecting $1,400 stimulus checks included in President Biden’s fiscal relief package signed into law in March,” the Wall Street Journal said. “The stimulus payments accounted for $3.948 trillion of the overall seasonally adjusted $4.213 trillion rise in March personal income.”
The stimulus checks from the American Rescue Plan, the report said, had a lot to do with the big number.
“The increase in personal income in March largely reflected an increase in government social benefits,” BEA said. “Within government social benefits, ‘other’ social benefits increased. The American Rescue Plan Act established an additional round of direct economic impact payments to households.”
According to Reuters, the arrival of the stimulus checks is beginning to unleash pent-up demand.
"While we aren't completely out of the woods yet, today's report shows the beginning of an economic rebound," Brendan Coughlin, head of consumer banking at Citizens in Boston, said of the report, per Reuters. "Assuming no setback in the continued rollout of the vaccines, U.S. consumers are well-positioned in the second half of the year to stimulate strong economic growth across the country."
Is inflation a concern, with this rapid economic growth? Economists and others have given different opinions on that. Fed Chairman Jerome Powell has mostly said that such concerns are likely temporary, rather than a long-term concern.
"While labor costs are hardly getting out of hand, there is clearly more wage pressure in the economy at present than the early stages of the past cycle," Sarah House, a senior economist at Wells Fargo in Charlotte, North Carolina, told Reuters.
"Stronger labor cost growth even before the economy hits full employment is a reason to think that even after the reopening-fueled pop this year, inflation is likely to settle above the anemic rate of the past cycle."
It’s all part of what’s expected to be a period of sustained economic growth, as the pandemic recedes and the associated restrictions are lifted.
Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.