Fiscal Cliff Income Surge

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Personal Income for December will be released tomorrow. The consensus expects a 0.7% jump from November. But early bonus payments (remember the Rose law firm and Hilary Clinton) and special dividends likely boosted income by much more. The Fiscal Cliff forced companies to make decisions before year-end. As a result, we forecast a humungous 3.0% gain in personal income for December, which would represent the largest month-to-month gain since Dec 2004 when Microsoft released a special dividend that boosted personal income by $32 billion. This increase in December would shift forward income that would typically be seen in the first two months of the year, so expect a negative January number as income returns to "normal" levels.

Posted on Wednesday, January 30, 2013 @ 10:53 AM

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