2024-03-18 11:15:00 ET
Summary
- Over the last two years, the evolution of the US economy has been driven by a return to “normal”.
- The change in cash levels at the household level were large and have proved more persistent than most expected.
- At the end of last year, checkable deposits and currency were still elevated well beyond the pre-COVID levels at 15.5% of GDP.
Over the last two years, the evolution of the US economy has been driven by a return to "normal". The distortions of the response to COVID had a profound impact on the economy that I believe will persist for many years. The change in cash levels at the household level was large and has proved more persistent than most expected. At the end of last year, checkable deposits and currency were still elevated well beyond the pre-COVID levels at 15.5% of GDP.
Checkable Deposits and currency, households and non-profits
Real incomes (adjusted for inflation) have also been rising robustly over the last year. The COVID response produced a big jump in incomes in 2020/21, then a large drop in 2022 as those programs expired. As things have returned to normal over the last year, Real Disposable Personal Income has been rising at an annual rate over 4%, much higher than the 2.7% from 2010-2019, 2.3% from 2000-2009, and even the 3.1% from 1990-1999....
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Weekly market Pulse: An Economic Overview