Our Drunken Sailors Push Back Against Rate-Cut Mania

By Wolf Richter – Wolf Street

Per-capita disposable income, adjusted for inflation (total income from all sources minus payroll taxes, adjusted for inflation), jumped by 4.3% year-over-year. In other words, disposable income is outrunning inflation by 4.3%, after having falling behind inflation in 2021 and 2022.

This surge in real income is what fuels the spending binge. And yet, consumers are still saving part of their income. Maybe they aren’t drunken after all, they’re just earning a lot more money?