Thomas Piketty, Emmanuel Saez. Gabriel Zucman — Distributional National Accounts: Methods and Estimates for the United States

This article combines tax, survey, and national accounts data to estimate the distribution of national income in the United States since 1913. Our distributional national accounts capture 100% of national income, allowing us to compute growth rates for each quantile of the income distribution consistent with macroeconomic growth. We estimate the distribution of both pretax and posttax income, making it possible to provide a comprehensive view of how government redistribution affects inequality. Average pretax real national income per adult has increased 60% from 1980 to 2014, but we find that it has stagnated for the bottom 50% of the distribution at about $16,000 a year. The pretax income of the middle class—adults between the median and the 90th percentile—has grown 40% since 1980, faster than what tax and survey data suggest, due in particular to the rise of tax-exempt fringe benefits. Income has boomed at the top. The upsurge of top incomes was first a labor income phenomenon but has mostly been a capital income phenomenon since 2000. The government has offset only a small fraction of the increase in inequality. The reduction of the gender gap in earnings has mitigated the increase in inequality among adults, but the share of women falls steeply as one moves up the labor income distribution, and is only 11% in the top 0.1% in 2014. JEL Codes: E01, H2, H5, J3....

The Quarterly Journal of Economics May 2018
Distributional National Accounts: Methods and Estimates for the United States

Thomas Piketty, Emmanuel Saez. Gabriel Zucman

FRED Blog — How Y=C+I+G has evolved : 70 years of quarterly national account data

FRED now has 70 years of quarterly national accounts data for the United States, which is an opportunity to look back at how the U.S. economy may have changed since 1947. In the graph above, we look at the three main expenditure components of real gross national product: real consumption, real investment, and real government expenses. They’re normalized to 100 for the first quarter of 1947, to make them more comparable....

FRED Blog
How Y=C+I+G has evolved : 70 years of quarterly national account data

JW Mason — The Nonexistent Rise in Household Consumption

Unless you've already read Household Income, Demand, and Saving: Deriving Macro Data with Micro Data Concepts by Barry Z. Cynamon . Federal Reserve Bank of Saint Louis, and Steven M. Fazzari, Washington University in St. Louis, you should probably read this whole post.

Most people don't realize how much of what goes into the headline measures of household income and household consumption does not actually correspond to any flow of money to or from households. In 2011 (the last year covered by the paper), personal consumption expenditure was given as just over $10 trillion. But of that, only about $7.5 trillion was money spent by households on goods and services....

... if we limit "consumption" to purchases by households, the long term rise in household consumption -- taken for granted by nearly everyone, heterodox or mainstream -- disappears....

By the official measure, personal consumption has risen from around 60 percent of GDP in the 1950s, 60s and 70s, to close to 70 percent today. While there are great differences in stories about why this increase has taken place, almost everyone takes for granted that it has. But if you look at Cynamon and Fazzari's measure, which reflects only market purchases by households themselves, there is no such trend. Consumption declines steadily from 55 percent of GDP in 1950 to around 47 percent today

The takeaway points:

 There's a common trope in left and heterodox circles that macroeconomic developments in recent decades have been shaped by "financialization." In particular, it's often argued that the development of new financial markets and instruments for consumer credit has allowed households to choose higher levels of consumption relative to income than they otherwise would. This is not true. Rising debt over the past 30 years is entirely a matter of disinflation and higher interest rates; there has been no long run increase in borrowing. Meanwhile, rising consumption really consists of increased non-market activity -- direct provision of housing services through owner-occupied housing, and public provision of health services. This is if anything a kind of anti-financialization.

The Fazzari and Cynamon paper has radical implications, despite its moderate tone. It's the best kind of amcroeconomics [sic]. No models. No econometrics. Just read the damn tables, and think about what the numbers mean.

The Slack Wire
The Nonexistent Rise in Household Consumption
JW Mason | Assistant Professor of Economics at Roosevelt University