So How’s That GDP Growth Treating You?

GDP was up 3.5% in the third quarter, and yesterday I wondered where all that growth was going.  Today we get part of the answer: not to workers.

The BEA reports that personal income and disposable personal income, adjusted for inflation, were down again in September and down for the entire quarter.  Spending was up in August thanks to Cash for Clunkers, but dropped 0.6% in September.

Separately, the BLS reports that the Employment Cost Index was up 0.4% in the third quarter.  However, since inflation rose about 0.6% in the same period, that’s a real decrease of about 0.2%.  “With incomes so soft,” analyst Ian Shepherdson said in a statement of the obvious, “increased spending will be a struggle.”

So: the economy is growing, but very little of that growth seems to be trickling down to us middle class types.  Happy holidays!


Mother Jones was founded as a nonprofit in 1976 because we knew corporations and the wealthy wouldn’t fund the type of hard-hitting journalism we set out to do.

Today, reader support makes up about two-thirds of our budget, allows us to dig deep on stories that matter, and lets us keep our reporting free for everyone. If you value what you get from Mother Jones, please join us with a tax-deductible donation so we can keep on doing the type of journalism that 2018 demands.

Donate Now