Justin Ho

Every month, the Bureau of Economic Analysis offers up a few different ways to measure people's income.

There's total personal income.

There's income after taxes.

But neither of those gives us a clear picture of what's going on with the labor market, because they include payments from the government that are not wages.

So the BEA offers another measure of income.

That's Menzi Chen, an economics professor at the University of Wisconsin-Madison.

Right now, that number is telling us that income has been falling.

It peaked back in September.

Shannon Grein is an economist with Wells Fargo.

She says one thing that's dragging it down is inflation.

Higher prices are eroding a lot of the purchasing power of households, which is obviously a challenge.

Grein says wage growth is slowing, too, because demand for labor is weak.

No matter how you want to characterize it, the labor market has moderated over the past number of years, right?

We're basically at stall speed in terms of hiring.

The latest openings data suggested a little bit of a pickup, but openings remain lower than they've been.

This decline in income could drag the rest of the economy down with it.

Kate Bond, chief economist with the Institute for Women's Policy Research, says that's because personal income is a leading indicator.

And when we have declining personal income, that is going to mean that particularly people with less wealth are going to have to either reduce their spending or have more debt to maintain their family consumption.

In a consumer-driven economy, when people have less disposable income, they're spending less.

And so there's less economic activity generated, broadly speaking.