As inflation soared, real household income dropped in 2022, according to the Organization for Economic Cooperation and Development (OECD).
The Paris-based group reported that per capita household income for the OECD countries fell by 3.8% last year — the largest annual decline on record.
For the G7, household income was down by 3.9%, led by a 6.0% drop in the U.S. as pandemic assistance to households came to an end.
“Even in economies that were not affected by the end of pandemic-related assistance programmes, increases in inflation undermined household incomes,” the OECD said.
Indeed, the group noted that incomes eroded, despite GDP growth during the year. However, that trend reversed in the fourth quarter.
While real household income was down sharply on the year, in the fourth quarter real household income per capita grew by 0.6% for the OECD overall — outpacing the 0.1% growth in real GDP per capita for the same period.
Canada, the U.S., the U.K., and France all reported increases in real household income per capita in the fourth quarter, the OECD said.