The slowdown in GDP growth to 0.7% announced for the fourth quarter of 2020 came after a marked rebound in growth of about 9% in Q3. Household income also rose in Q3 as policy makers continued their support measures for workers and businesses in most OECD countries.
After two quarters of decline, household incomes rose in Italy by 6.4%, the United Kingdom by 5.1%, Germany by 4.3% and France by 3.5%. But household income fell by -4.2% in the United States and by -3.6% in Canada, and these decreases translated into an overall increase for the OECD area of just 0.6%. The US and Canadian contractions followed two periods of sharp rises that were driven by government financial transfers to households in response to COVID-19.
The high volatility currently affecting overall levels of household income in many countries reflects the extent to which fiscal policy responses can vary by amount and duration, policies which remain essential during the ongoing pandemic.
Read more on third quarter household income growth here.
Read more about fourth quarter GDP Growth here.