For the first time since 2007, OECD households’ income grew by 5.3% in the second quarter of 2020 thanks to COVID-19 government support measures, despite the fact that GDP per capita plunged by a significant 10.6% fall.
The largest discrepancies were in the United States and in Canada, where household income per capita grew 11.0% and 10.1% respectively, reflecting the broad-based direct monetary transfers sent to the household sector in response to COVID-19. Given the temporary nature of the measures however, household income is expected to contract in Q3 in both of these countries.
There were smaller increases in real household income per capita in Ireland (3.6%), Australia (2.7%) and Finland (1.1%), where households received large increases in social benefits.
Although real household income per capita continued to fall in Germany, France, the United Kingdom and Italy in the second quarter, household income growth held up much better than GDP growth, reflecting the smaller but continual government assistance in these countries.