By the numbers: In June, total income rose 0.1%. It was that low because government support declined 2%. Market income grew much more strongly. Wages grew 0.8% for the month, and business owners’ income grew an even more robust 1.1%. This is proof the economy can stand on its own and does not need government support any longer.

Despite the withdrawal of government stimulus, income remains 7% higher than pre-pandemic.

Savings fell in June compared to May, but it is still elevated. Americans saved $141 billion during the month, which is still far above the pre-pandemic trend. In total, Americans have saved almost $4.2 trillion since March of 2020. That’s more than $2.5 trillion over what they would’ve saved during that time. All that savings will boost spending into 2022.

Spending rose 1% in June, which handily beat expectations. Analysts expected spending to be soft because of lack of government support. But growing incomes and pent-up savings means Americans have plenty of money to spend, which they did in June.

But: Rising prices continue to be a major potential headwind for the economy. The PCE Index, the Fed’s preferred measure of inflation, rose 4% on an annual basis in June. This is well above the Fed’s 2% target, but not so high as to be worrying to them – yet. If it jumps much higher in July, that would be a strong warning sign.

ICYMI: The Chamber’s Chief Economists Committee met last week to discuss inflation. Most committee members see inflation declining the rest of the year and into 2020. You can read more about their inflation expectations and predictions of the Fed Funds rate here.

—Curtis Dubay, Senior Economist, U.S. Chamber of Commerce