SBE Council Chief Economist on Personal Income and the Inflation Tax

Raymond J. Keating, chief economist for the Small Business & Entrepreneurship Council (SBE Council), issued the following statement about the April 2011 personal income numbers released by the U.S. Bureau of Economic Analysis this morning:

"The inflation tax has wiped away gains on the income front this year. Growth in inflation-adjusted disposable income - that is, personal income less personal current taxes - is what matters, as that captures the growth in real dollars available for consumption, saving and investment. No real growth in disposable income is another worry for a grossly under-performing economic recovery. And this is another dire example of how inflation hurts the economy, and why the Federal Reserve needs to get re-focused on maintaining price stability."