Growth and economic well-being: First quarter 2022, OECD

Strong inflation drives fall in real household income

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4 Aug 2022 – Real household income per capita fell by 1.1% in the OECD area in the first quarter of 2022, contrasting with growth of 0.2% in real GDP per capita (Figure 1). This is the fourth quarter in a row that GDP per capita has outpaced household income per capita, reducing the gap observed at the onset of the pandemic (Figure 2). Real household income is now 2.9% higher than it was in the fourth quarter of 2019, while real GDP is 1.6% higher.

The decline in real household income per capita in Q1 2022 was partly due to increases in consumer prices, which undermined household income in real terms. Among the G7 economies,[1] the impact of inflation on households in Q1 2022 was particularly clear in France, where real household income per capita fell by 1.9% and Germany, where it fell by 1.7%.Elsewhere in Europe, high household inflation also contributed to large falls in real household income per capita in Austria (minus 5.5%) and Spain (minus 4.1%).

Among G7 countries, Canada recorded the highest growth in real household income per capita in Q1 2022 (up by 1.5%). This was mainly due to growth in ‘compensation of employees’ (employees’ wages and salaries and social contributions by employers), which rose by 3.8% in nominal terms in Q1 2022.[2]

Visit the interactive OECD Data to explore this data further.

1. This analysis excludes Japan, for which quarterly household income estimates are not yet available: see methodological notes.

2. Country comparisons of ‘compensation of employees’ are available from the OECD database here.

> Household Dashboard for quarterly growth rates of real household income per capita and real GDP for all OECD countries (when available) and geographic groupings.

> Non-financial accounts by economic sector for the full set of non-financial quarterly sector accounts

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