Over the course of 2022, America’s real disposable income fell to its lowest level since the 1932 Great Depression, Heritage economist EJ Antoni said Thursday.
The Federal Reserve Bank of St. Louis shows real disposable personal income dropped to -6.4%, data released by the Federal Reserve Bank of St. Louis shows. The steep decline cost Americans over a trillion dollars in 2022, Antoni reported.
Context: second worst drop in real disposable income EVER, behind Great Depression year of 1932: https://t.co/0A5VH2ZaY3 pic.twitter.com/hl7sXfvlSJ
— EJ Antoni (@RealEJAntoni) January 26, 2023
Antoni said the latest data on U.S. gross domestic product (GDP) and consumer spending showed the Atlanta Federal Reserve Bank’s final GDP projections were “too rosy.” He said the 2.1% real GDP for 2022 was the slowest growth since 2016, outside the 2020 and 2021 pandemic years.
And for 2022:
Real GDP 2.1%
-excluding pandemic years of ’20/’21 that’s slowest growth since ’16
Nominal GDP 9.2% ($2.15 trillion)
Inflation 7.1%
PCE price index 6.2%
Core PCE price index 5.0%
Real disposable income -$1,024.2 billion
Savings -$1,634.3 billion— EJ Antoni (@RealEJAntoni) January 26, 2023
“The gain from net exports is not a good sign: both imports and exports are falling, imports are just falling faster; international trade slowdown is not a sign of wealth for Americans,” Antoni tweeted.
The rise in real GDP in 2022 was primarily driven by increases in consumer spending (1.42%), net exports (.56%), private inventory investments and nonresidential fixed investments, according to the Bureau of Economic Analysis (BEA). Residential fixed investment, which dropped an estimated 26.7%, and fourth-quarter state and local government spending offset the increases, the BEA reported.
Residential spending fell because the “consumer can’t afford both high home prices and high borrowing costs,” Antoni said, adding “homeownership affordability [is] at [its] lowest point since it began being measured.” (RELATED: US GDP Ticks Up, But Recession Fears Remain)
The BEA released data showing the real GDP grew at an annual rate of roughly 2.9% in the fourth quarter of 2022 (Q4), after increasing 3.2% in Q3.
Job Creators Network President Alfredo Ortiz told the Daily Caller News Foundation the Q4 growth was “modest” and “will do little to alleviate the growing recession fears among small businesses across America.”
“President Biden will use this Q4 GDP number to claim economic victory in a speech later today. Yet the war on elevated inflation and meager economic growth is far from won,” Ortiz continued.