Charts and analysis provided by David N. Frazier: Editor of the ETF Strategist
Data
The U.S. Department of Commerce reported this morning that Inflation-Adjusted After-tax Personal Income (Real Disposable Personal Income) declined to $10.137 billion during September, from $10.143 billion during the prior month.
Trend
Real Disposable Personal Income trended lower during each of the past three months, after rising from November 2010 through June of this year.
Analysis
The recent declines in the after-tax incomes of Americans suggest that U.S. households will reduce their spending on various types of household goods and services during the next few months.
Impact
The declines in Americans' after-tax incomes will likely lead to a slowdown in the pace of U.S. economic growth during the remainder of this year. That's because households tend to reduce their spending when their incomes decline, and because personal consumption expenditures account for approximately 70 percent of the total output of goods and services in the United States -- 70% of Gross Domestic Product ("GDP").