Real household income falls slightly after four quarters of growth

 

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08 Feb 2024 - Real household income per capita in the OECD fell by 0.2% in the third quarter of 2023, while real GDP per capita grew by 0.3% (Figure 1). The decrease in real household income per capita ended four consecutive quarters of growth starting in Q3 2022.

Despite the overall decrease, 11 OECD countries registered an increase in real household income per capita in Q3 2023. Hungary saw the greatest increase (5.5%), due to strong growth in remuneration of employees, income from self-employment and property income.^[1] Of the 21 OECD countries for which data was available, the other 10 saw decreases. Spain experienced the largest contraction (-2.1%), driven by an increase in taxes on income and wealth (Figure 2).

Among G7 economies, real household income per capita rose by 1.4% in Italy, driven mainly by growth in remuneration of employees and income from self-employment.^[2] The United Kingdom also saw growth of real household income per capita, but it slowed to 0.2% in Q3 2023 from 2.1% in the previous quarter as real GDP per capita declined for the second quarter in a row. Germany experienced a 0.6% decrease in real household income per capita, with real GDP per capita falling for the fourth quarter in a row. Canada also saw a decrease in real household income per capita in Q3 (-0.5%), marking a third consecutive quarter of declining real household income per capita^[3] against a backdrop of near-zero or negative GDP growth. In the United States, despite a 1% increase in real GDP per capita and increases in renumeration of employees and income from self-employment, real household income per capita fell slightly in Q3 (-0.3%); this was mainly due to decreases in government social benefit payments including Medicaid and increases in payments of taxes and social insurance contributions. France experienced a mild contraction (-0.1%) in both real household income per capita and real GDP per capita. 

 

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