Consumers' incomes have recovered about a quarter of the ground they lost during the recession and its aftermath, but progress has stalled in recent months, a new report says.
Median household incomes, before taxes and adjusted for inflation, have risen 2.2% in the last year through June, according to Sentier Research, a consulting firm founded by Census Bureau researchers. They remain 7.2% below where they were in December 2007 -- the start of the recession -- and 4.8% below when the recession ended in June 2009, Sentier reported.
The recent improvement was concentrated in late 2011, but the median has slipped slightly this year, in part because of inflation, Sentier partner Gordon Green said.
"Inflation is a big player now" in future household budgets, Green said. "Incomes have flattened out, and gas prices are going up again."
Consumers have lost more ground since the recession ended than they did while it was still occurring, the report said, repeating a conclusion Sentier published last year.
The damage has been much worse, predictably, in homes where the person listed as the property owner or renter has been unemployed. Their incomes are down 22.6% since June 2009. But even households where the primary earner has been employed continuously also have incomes almost 5% lower than in June 2009.
Other groups hit harder than average include young people, men living alone and people who have some college but not a degree, Sentier said.
"It substantiates what (community college) teachers tell their students: If you're going to get a two-year degree, get it in something marketable," Green said, adding, "25- to 34-year-olds got hit pretty hard."
So have people nearing retirement age. Those ages 55 to 64 have seen a 9.7% drop in median household income since June 2009.
Politically, the results highlight the stakes of the presidential election. The biggest income drops are in nine swing states, which have incomes that are still 5.7% below 2009. The drop was 5.2% in "blue" states that lean Democratic, and 5% in Republican-leaning "red" states, which have the lowest incomes of the three groups.
Consumers have responded to lower incomes by reducing debt, said Mark Cole, executive vice president of CredAbility, a non-profit consumer credit counseling service in Atlanta.
"Everyone has worked really hard to control expenses and clean up their debt," said Cole. "A lot of it is because they are scared about the future."
Most Popular Stories
- Schedule packed with talent at the Fox
- I never set out to be a role model but it's great to be one ; IN THE HOTSEATBetter known by his stage name Wretch 32, Jermaine Sinclair is a 28-year-old rapper from London. In 2011 his debut album Black and White sold over a million copies and scored three top five singles. His latest single Blackout was released this week
- European Car Sales up First Time in 20 Months
- Promoter McLean 'provided more musical joy than Dylan and Prince combined'
- Entrepreneurs Chase Social Media
- Emirati announces new film project at Cannes
- SET PHASERS TO DUMB Spock emotional and in love? Nonstop explosions? The highly illogical enterprise of J.J. Abrams' 'Star Trek'
- The Blade, Toledo, Ohio, TK Barger column
- SINCE YOU ASKED [Pittsburgh Tribune-Review (PA)]
- Detroit Free Press Julie Hinds column