In his latest note, David Rosenberg of Gluskin-Sheff says you should ignore recent data showing that personal income is growing again.
Because as the chart below shows, more than ever, personal income is comprised of government transfer payments, not actually real income derived from the productive part of society.
But maybe that’s no big deal. We’re getting older all the time, so naturally things like Social Security are going to comprise more and more of our income.
Obviously the recession has hurt a lot, but due to demographics alone, we could see this chart go up and to the right for a long time.