Real Disposable Income Per Capita Gains in July

With the release of yesterday's report on July Personal Incomes and Outlays, we can now take a closer look at "Real" Disposable Personal Income Per Capita.

At two decimal places, the nominal 0.21% month-over-month change in disposable income was trimmed to 0.12% when we adjust for inflation. The year-over-year metrics are 1.98% nominal and 0.57% real. The trend since 2013 has been one of steady growth.

The first chart shows both the nominal per capita disposable income and the real (inflation-adjusted) equivalent since 2000. This indicator was significantly disrupted by the bizarre but predictable oscillation caused by 2012 year-end tax strategies in expectation of tax hikes in 2013.

DPI per Capita since 2000

The BEA uses the average dollar value in 2009 for inflation adjustment. But the 2009 peg is arbitrary and unintuitive. For a more natural comparison, let's compare the nominal and real growth in per-capita disposable income since 2000. Do you recall what you were doing on New Year's Eve at the turn of the millennium? Nominal disposable income is up 73.1% since then. But the real purchasing power of those dollars is up only 26.6%.

DPI per Capita Growth