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Real Personal Income less Transfer Payments Above Previous Peak

Government transfer payments decreased in May compared to April, but were still almost $1.0 trillion (on SAAR basis) above the February 2020 level (pre-pandemic)  Note: Seasonal adjustment doesn’t make sense with one time payments, but that is how the data is presented.  

Most of the increase in transfer payments – compared to the levels prior to the crisis – is from unemployment insurance and “other” (includes direct payments). 

This table shows the amount of unemployment insurance and “Other” transfer payments since February 2020 (pre-crisis level).  The increase in “Other” was mostly due to parts of the relief acts including direct payments.

There was a large increase in “Other” in March due to the American Rescue Plan Act.
Note: Not in the table below, but Social Security payments haven’t increased significantly since the pre-recession levels (from $1,065 billion SAAR in Jan 2020 to $1,111 billion SAAR in May 2021).

Selected Transfer Payments
Billions of dollars, SAAR
Other Unemployment
Feb-20 $506 $28
Mar-20 $515 $74
Apr-20 $3,379 $493
May-20 $1,360 $1,356
Jun-20 $758 $1,405
Jul-20 $760 $1,331
Aug-20 $692 $636
Sep-20 $936 $359
Oct-20 $732 $304
Nov-20 $620 $281
Dec-20 $654 $304
Jan-21 $2,355 $556
Feb-21 $778 $535
Mar-21 $4,748 $541
Apr-21 $1,404 $495
May-21 $865 $459

A key measure of the health of the economy (Used by NBER in recession dating) is Real Personal Income less Transfer payments.

Real Personal Income less Transfer payments Click on graph for larger image.

This graph shows real personal income less transfer payments since 1990.

This measure of economic activity increased 0.4% in May, compared to April, and was up 0.8% compared to February 2020 (previous peak).

This is the first of the key NBER measures – GDP, Employment, Industrial Production, Real Personal Income less Transfer Payments – that is above pre-recession levels. GDP will be above pre-recession levels in Q2.

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