Inflation is increasingly outpacing American incomes:
Real disposable income fell -1.1% YoY in April, the biggest decline since October 2022.
On an annualized MoM basis, this metric dropped -5.6%, the biggest decline since May 2025.
Furthermore, real personal income excluding government transfer payments fell -0.4%, the 4th monthly decline in 5 months.
This metric captures after-tax income from labor and capital sources while excluding government support such as Social Security and unemployment benefits.
Over the last 6 months, real personal income excluding transfer payments has declined by an annualized -1.8%, the largest drop since 2022.
Historically, such weakness has rarely occurred outside of a recession or an economic slowdown.
Inflation is eroding the purchasing power of most Americans.
