2.9% Income Growth from Year Ago Required to Keep Up in U.S. Economy

Friday July 31, 2015

Based upon Thursday’s U.S. first quarter “second” GDP estimate and second quarter “advance” estimate released by the Bureau of Economic Analysis (BEA), StayingEven.com has estimated the Q2 2015 Staying Even Index (SEI) at 2.6% and the YTD SEI through Q2 at 2.9%.  The SEI measures the year-to-year income growth required for individuals to keep up in the U.S. economy.  The YTD 2.9% growth in the SEI is significantly higher than the reported 0.0% increase in the consumer price index (CPI) compared to the year ago period, demonstrating that raises that keep up with reported inflation are not sufficient to stay even in the growing U.S. economy.  

Additionally, based upon the BEA’s upward revision to estimated 2014 nominal GDP growth, from 3.9% to 4.1%, StayingEven has revised 2014 SEI growth to 3.3% from the previously reported 3.1%.

The 2015 2.9% YTD increase in the Staying Even Index (SEI) is based upon reported YTD Q2 year-over-year nominal GDP growth of 3.6% and average population growth of 0.7%. 

These estimates suggest that individuals whose YTD Q2 2015 total income from all sources grew by more than 2.9% from the same period in 2014 expanded their adjusted share of the U.S. economy, and those whose total income grew by less than this fell behind compared to the prior year. Similarly, those individuals who grew their 2014 total income more than 3.3% expanded their share of the economic pie, and those who didn’t fell behind.

StayingEven.com will publish updates to these figures as GDP and population estimates are revised over the coming months and as future quarter GDP estimates are released.  We are dedicated to helping individuals understand what income growth is required to keep up in the U.S. Economy.  

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