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Disposable Income Trends Up 2.94% YoY
The US economy is driver by the consumer. Consumer spending accounts for about 66% of the GDP growth. The total disposable Income for all US persons is an important indicator to be aware of since it has a sufficient impact on the overall economy. Let’s look at the figures during the US Recession, which was between 2008 and 2010. On January 2, 2008 it was $10,995.40B and on January 2, 2010 it was $11,243.70B. Over that timeframe it increased some 2.26%. To put it some perspective, in 1980 it was $2,018.00B, in 1990 it was $4,311.80B and in 2000 it was $7,400.50B. And it was up to $12,245.80B in January 2, 2012. Here is a 5 year chart that denotes the trend.
For a one year term the monthly figures are shown in the table below and the chart afterwards.
US per capita personal income is at a current 42348.00. That's up from 42296.00 from last month. That's about a monthly annualized growth rate of 1.48%. That's compared to a long-term average annualized growth rate of 5.39%. Its a changed from one year ago by 2.94%, and changed 0.12% from previous. The tend over the past year appears to be good. That in itself indicates one data point for a growing US economy.
Understand that as value investors trends are worth noting. As the data or facts support higher disposable income which points to certain industries that will see future growth over the long-term. This strategy is the better path to above average gains and thus we focus on investments over that time frame. We see short-term volatility as an opportunity from Mr. Market to buy at lower discounted prices that before. So do not “follow the crowd” and sell your investments at this point. Instead now is the time to buy new positions or add to existing positions as prices are discounted even more.
At Port Wren Capital, LLC, we specialize in picking specific undervalued U.S. stocks using fundamental analysis developed by Benjamin Graham using a five step process. We have beaten the S&P500, DJIA and NASDAQ benchmarks since we started 5 years ago on our own investments. Discover the difference for yourself. To learn more contact us today.
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