Income Growth of 3.5% Required to Keep Up in the Growing US Economy, Down from 4.8% in 2018
Saturday November 16, 2019

As the end of 2019 approaches, many employees in the U.S. are approaching for annual compensation and raise discussions. This is the time of year where the Staying Even Index becomes most relevant, as it is designed to inform these discussions and decisions with good data about how fast the U.S. economy is growing, on a per capita, or per person, basis, and therefore how much income growth each person in the US would need to achieve to “stay even”, or, put differently, maintain their relative share of the US economy.

In Q3, US economic growth continued to moderate, driving a continued deceleration of the Staying Even Index through Q3 2019. Based upon the release by U.S. Bureau of Economic Analysis of its “Advance Estimate” of Q3 2019 GDP, StayingEven’s initial estimate of the YTD Q1 2019 Staying Even Index (SEI) is 3.5%, a deceleration from 2018’s revised 4.8% reading.

This reading is significantly the reported 1.7% increase in the average consumer price index (CPI) for this period, once again demonstrating that wages that increase with inflation/COLA are not sufficient to keep up in the growing U.S. economy.

The 3.5% increase in the YTD 2019 Staying Even Index (SEI) is based upon reported nominal GDP growth of 4.1% and estimated population growth of 0.6%.

These projections suggest that individuals whose YTD Q2 2019 total income from all sources (after tax wages and other income) grew by more than 3.5% from 2018 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. SEI growth for calendar year 2018 was 4.8% (revised).

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

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To find out whether you have gotten ahead, try our Staying Even Calculator, and to learn more about the Index, visit us at StayingEven.com. You can also follow us @stayingeven on Twitter.