In the third quarter of 2022, households saw their first increase in real incomes since the start of 2021, the Organization for Economic Cooperation and Development (OECD) reported — however, in some cases, these gains are being swamped by inflation.
Across the OECD, real household income rose by 0.2% in the third quarter, as real GDP was up 0.3%.
However, the headline increase obscured some mixed trends throughout the OECD. Real household incomes were up in nine countries, but declined in 12 others, including Canada and Britain, and incomes were flat in the U.S.
The OECD also reported that per capita household income was ahead of pre-pandemic levels in most of the OECD — except for Czech Republic, Denmark, Finland, Portugal, Spain, and the U.K. — in the third quarter.
Large falls in self-employment income, and a slow recovery in that area, hampered income readings in Spain and Portugal, the OECD said — noting that most countries saw a strong rebound in self-employment income following an initial drop due to the pandemic.
While household incomes have risen in most regions since the onset of the pandemic, these gains have been eroded by high inflation, the OECD also noted.
For instance, in the UK, disposable income was up by 9.0% in nominal terms by the third quarter of 2022 from the onset of the pandemic, yet real household income is down by 3.9% due to the effects of inflation, it said.