2004 U.S. Income Growth Best Since 1999

By Scott Hoyt in West Chester 1/28/2005

Personal income grew 5.4% last year, boosted by the first yearly job gains in three years and the strongest in four. Disposable income growth was modestly stronger as households continued to benefit from tax cutting. Growth was led by dividend income as companies responded to investor demand for dividends following the cut in income taxes on dividends. The $32 billion Microsoft dividend to shareholders payable in December contributed to the strong growth in dividend income. Dividend income will post a healthy gain this year, although it will be restrained by the fact that Microsoft’s payout will not be repeated. Proprietors’ income grew at over 8% for the second consecutive year last year as workers who were struggling to find jobs continued to start their own businesses. As labor markets firm, proprietors’ income growth will slow going forward....

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