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Americans see disposable income, savings decrease
By CASEY HARPER
THE CENTER SQUARE SENIOR REPORTER
(The Center Square) — The U.S. Gross Domestic Product decreased by 1.6% in the first three months of 2022, the latest federal economic data released Wednesday shows.
Previously, the Bureau of Economic Analysis said the economy shrank by 1.5% before revising the numbers.
“The decrease in real GDP reflected decreases in exports, federal government spending, private inventory investment, and state and local government spending, while imports, which are a subtraction in the calculation of GDP, increased,” the BEA said. “Nonresidential fixed investment, PCE, and residential fixed investment increased…”
The BEA also confirmed what other federal data has shown: significant price increases.
“The price index for gross domestic purchases increased 8% (revised) in the first quarter, compared with an increase of 7% in the fourth quarter…,” BEA said. “The PCE price index increased 7.1% (revised), compared with an increase of 6.4%. Excluding food and energy prices, the PCE price index increased 5.2% (revised), compared with an increase of 5.0 %.”
According to the data, Americans also saw a decrease in their disposable income as well as their savings.
“Disposable personal income decreased $58.8 billion (revised), or 1.3%, in the first quarter, in contrast to an increase of $72.4 billion, or 1.6%, in the fourth quarter,” BEA said. “Real disposable personal income decreased 7.8% (revised), compared with a decrease of 4.5%. Personal saving was $1.02 trillion in the first quarter (revised), compared with $1.45 trillion in the fourth quarter.
“The personal saving rate — personal saving as a percentage of disposable personal income — was 5.6% (revised) in the first quarter, compared with 7.9% in the fourth quarter.”
This data comes alongside a steady stream of federal inflation data that shows prices have soared in recent months. The federal producer price index rose 10.8% in the previous 12 months, and consumer prices have risen at the fastest pace in four decades.
Meanwhile, gas prices hit record highs earlier this month, topping $5 per gallon before dipping down. According to the American Automobile Association the national average price for regular gasoline is $4.87 per gallon, well over the average price of $3.11 at the same time last year.
California remains above the national average. On Wednesday, AAA reported the state’s average was $6.30 a gallon. In Santa Barbara County, the average was $6.29.
Critics blasted President Joe Biden after the GDP numbers were released.
“Real GDP dropped 1.6%, and the Biden Administration is still trying to say that the economy is great,” U.S. Rep. Lisa McClain, R-Mich., wrote on Twitter.
News-Press Managing Editor Dave Mason contributed to this report.
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