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.