Real Disposable Income Per Capita in March, All-Time High

With the release of this morning's report on March's Personal Incomes and Outlays, we can now take a closer look at "Real" Disposable Personal Income Per Capita. At two decimal places, the nominal 23.57% month-over-month change in disposable income is cut to 22.94% when we adjust for inflation and an all-time high. This is an increase from last month's -7.91% nominal and -8.13% real increases last month. The year-over-year metrics are 31.77% nominal and 28.78% real.

Post-recession, the trend was one of steady growth, but generally flattened out in late 2015 with increases in 2012 and 2013. As a result of the CARES Act and the COVID pandemic, a major spike is seen in April 2020 and January 2021.

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 and more recently, by the CARES Act stimulus.

DPI per Capita since 2000

The BEA uses the average dollar value in 2012 for inflation adjustment. But the 2012 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 108.6% since then. But the real purchasing power of those dollars is up 43.1%.

DPI per Capita Growth