PARIS - Real household income per capita fell by 1.1% in the OECD area in the first quarter of 2022, contrasting with growth of 0.2% in real GDP per capita (Figure 1). This is the fourth quarter in a row that GDP per capita has outpaced household income per capita, reducing the gap observed at the onset of the pandemic (Figure 2). Real household income is now 2.9% higher than it was in the fourth quarter of 2019, while real GDP is 1.6% higher.

The decline in real household income per capita in Q1 2022 was partly due to increases in consumer prices, which undermined household income in real terms. Among the G7 economies,[1] the impact of inflation on households in Q1 2022 was particularly clear in France, where real household income per capita fell by 1.9% and Germany, where it fell by 1.7%. Elsewhere in Europe, high household inflation also contributed to large falls in real household income per capita in Austria (minus 5.5%) and Spain (minus 4.1%).

Among G7 countries, Canada recorded the highest growth in real household income per capita in Q1 2022 (up by 1.5%). This was mainly due to growth in ‘compensation of employees’ (employees’ wages and salaries and social contributions by employers), which rose by 3.8% in nominal terms in Q1 2022.