The State of America’s Private Sector XXI: March 2011

Today the U.S. Department of Commerce’s Bureau of Economic Analysis released their monthly personal income data for March 2011 (pdf).

The chart below shows the private sector share of personal income from January 1959 to March 2011.  The data for March looks like it might be pointing to trouble.  First, after nearly a year of continuous growth, the private sector share of personal income fell in March to 70.44 percent from 70.49 percent in February.

That by itself would necessarily be cause for alarm since it could just be a one month blip.  However, looking more closely at the data reveals a disturbing turnaround in “government unemployment insurance benefits” (GUIB) in March.  The highpoint for GUIB was in March 2010 when it was at 156.8 billion and has since fallen from that high to 112.8 billion in February 2011.

In March it climbed to 118.1 billion.  Between January and February, GUIB fell by 10 billion, but for March went up by $5.3 billion–that is a $15.3 swing which significantly influenced the decline in the private sector share.  To highlight the importance of GUIB, in August, 2010 the private sector share also fell and GUIB climbed from $123.2 billion in July, 2010 to $150.5 billion in August, 2010.  But that was just a one month blip and a larger one at that.

The question now is–will GUIB continue to increase or was this too merely a one month blip that will correct itself in April?  Given that gas prices are now at $4 a gallon ($3.95 in my neck of the woods), I’m thinking that this is more than just a blip.  Anyone else have any insights on this?

Note: “Supplements to Wages and Salaries” (benefits) in the BEA data are not broken down into “private” sector” versus “government” components. I used the ratio of private wages and salaries to total wages and salaries in order to disaggregate supplements.

Private Sector Monthly March 2011

The State of America’s Private Sector XX: February 2011

Today the U.S. Department of Commerce’s Bureau of Economic Analysis released their monthly personal income data for February 2011 (pdf).

The chart below shows the private sector share of personal income from January 1959 to February 2011.  Since the private sector hit its inflection point in April 2010, the private sector continues to rebound up to 70.47 percent in February from 70.39 percent in January.  The private sector has now grown in 10 of the past 11 months adding a total of 0.78 percentage points.

Note: “Supplements to Wages and Salaries” (benefits) in the BEA data are not broken down into “private” sector” versus “government” components. I used the ratio of private wages and salaries to total wages and salaries in order to disaggregate supplements.

Private Sector Share of Personal Income for February 2011

The State of America’s Private Sector XVIII: January 2011

Today the U.S. Department of Commerce’s Bureau of Economic Analysis released their monthly personal income data for January 2011 (pdf).

The chart below shows the private sector share of personal income from January 1959 to January 2011.  Since the private hit its inflection point in April 2010, the private sector had its largest gain of 0.5 percentage points between December 2010 and January 2011.  The private sector has now grown in 9 of the past 10 months adding a total of 0.66 percentage points.

It will be interesting to see if the private sector can maintain this momentum in the face of the Egyptian riots and consequent rise in oil prices.  As David R. Kotok, Chairman and Chief Investment Officer of Cumberland Advisors, recently said in one of his email updates: “The risk of recession in the US and European economies is rising daily.”

Note: “Supplements to Wages and Salaries” (benefits) in the BEA data are not broken down into “private” sector” versus “government” components. I used the ratio of private wages and salaries to total wages and salaries in order to disaggregate supplements.

Private Sector Share of Personal Income for U.S. in January 2011

The State of America’s Private Sector XVII: December 2010

Today the U.S. Department of Commerce’s Bureau of Economic Analysis released their monthly personal income data for December 2010 (pdf).

The chart below shows the private sector share of personal income from January 1959 to December 2010. The private sector grew again by another 0.08 percentage points and has now grown for 4 consecutive months adding a total of 0.31 percentage points.  Interestingly, the revisions to recent months have downshifted the growth in the private sector.

Now that the Bush tax cuts extensions are now law, will the private sector be able to continue its growth against another round of government spending?  All of the new spending contained in the bill will show up in personal current transfer receipts, thus accelerating the growth in government spending.  As long as the private continues to grow as it has, I think the new spending will cause the private sector to plateau for awhile but not retreat.  Of course, in the long-run, I think the opposite is true with the downward trend in the private sector continuing.

Note: “Supplements to Wages and Salaries” (benefits) in the BEA data are not broken down into “private” sector” versus “government” components. I used the ratio of private wages and salaries to total wages and salaries in order to disaggregate supplements.

Private Sector Share of Personal Income for December 2010

The State of America’s Private Sector XV

Today the U.S. Department of Commerce’s Bureau of Economic Analysis released their monthly personal income data for November 2010 (pdf).

The chart below shows the private sector share of personal income from January 1959 to November 2010. The private sector grew again by another 0.1 percentage points and has now grown for 3 consecutive months adding a total of 0.5 percentage points.  Interestingly, while the public sector grew in November, the private sector grew even faster allowing the private sector to gain share.

Now that the Bush tax cuts extensions are now law, will the private sector be able to continue its growth against another round of government spending?  All of the new spending contained in the bill will show up in personal current transfer receipts, thus accelerating the growth in government spending.  As long as the private continues to grow as it has, I think the new spending will cause the private sector to plateau for awhile but not retreat.  Of course, in the long-run, I think the opposite is true with the downward trend in the private sector continuing.

Note: “Supplements to Wages and Salaries” (benefits) in the BEA data are not broken down into “private” sector” versus “government” components. I used the ratio of private wages and salaries to total wages and salaries in order to disaggregate supplements.

Private Sector Share of Personal Income for November 2010