US incomes fall across the board except for the rich in 2014
07 Apr 2015
Incomes of most US citizens continued to fall last year, while the richest 20 per cent saw their incomes rise, according to a new US Department of Labor report.
In fresh data that added to an escalating debate about income inequality, the department said that US citizens on an average saw their incomes fall for the second straight year in the 12 months to June 2014.
The average pre-tax income declined 0.9 per cent from the same period a year earlier, to $64,432. However, broken down into quintiles, those in the top 20 per cent of income saw their money swell 0.9 per cent to $166,048 on average.
Every other group suffered, with the bottom 20 per cent losing the most as their average income declined 3.5 per cent to $9,818.
The losses came despite an economy that was on the mend generating in excess of 200,000 jobs a month last year. Even as the majority of incomes fell, consumer spending, which accounted for about two-thirds of US economic activity, was up 1 per cent on average.
The largest increase was 11.3 per cent in healthcare spending, which had increased every year since 1996 to an average of $3,919.
Meanwhile it was not a very good Friday for the labour market.
The US economy added only 126,000 jobs in the month of March, which turned out to be the worst month for employment gains since December 2013. Nearly 70,000 jobs originally reported in the months of January and February were also knocked off due to revision in the figures.
Friday broke a 12-month streak of at least 200,000 job additions and was down from analysts' 250,000-addition expectations by wide margin.
February's originally reported gain of 295,000 jobs was down to 264,000, and January's previously revised figure of 239,000 was down 201,000 due to revisions.
To make the figures even worse, the labour market had added an average of 269,000 positions each month for the past 12 months – over twice the additions reported Friday.
Also, though after Wednesday's weak ADP National Employment Report some economists backed off from their projections for Friday, few projected such a steep month-over-month drop.
The unemployment however, held steady at 5.5 per cent in March, even as 96,000 people exited the workforce, and the labour marked had 157,000 fewer entrants. The labour force participation rate slid to 62.7 per cent.