Why you're feeling poor despite the recovery
American households have yet to regain income lost during the financial crisis. The median level is still $3,400 lower.
Nearly six years after the start of the recession, much of America's economy is getting back on track, from the housing market to unemployment levels.
So, why do so many Americans feel poor? That's because median household income is still nowhere near its level from before the financial crisis, according to a study released by two former Census Bureau officials.
Median annual household income was $52,100 in June, still $3,400 lower than in December 2007, when the recession began, The New York Times reports, citing the study.
While most economic indicators compare month-to-month or year-over-year gains or losses, the study provides the unusual perspective of considering what Americans have lost since the start of the global recession.
For many, the past few years have hit their pocketbooks in painful ways, explaining why so many families feel economically insecure despite the official end of the recession.
For instance, June's median annual household income of $52,100 is an improvement from recent inflation-adjusted bottom of $50,700 in August. But because Americans still aren't back to pre-crisis income levels, that may explain why a majority of them feel the country is still suffering from a recession.
Not every group in America is suffering equally, however. The biggest drops in median household income have come at the expense of those already lagging: African Americans, those without college degrees, young people and Southerners.
"Based on our data, almost every group is worse off now than it was four years ago, with the exception of households with householders 65 to 74 years old," said Gordon W. Green Jr. of Sentier Research in a statement.
Householders between 65 to 74 benefited from a 5.1% increase to their median income, the only group to show a statistically significant gain, the researchers said. At the same time, households headed by people under 25 years old saw median annual income decline 9.6%, while African-American households witnessed a slip of almost 11%, the study found.
Perhaps even more dispiriting, in going back even further the study found that overall American household income is 7.2% lower than in 2000, before the Internet boom ended in a bust and the recession in the early part of that decade.
The erosion of American household income may explain why Wal-Mart (WMT) and other retailers are reporting disappointing sales trends. After all, consumers with less money in their pockets aren't likely to buy new products, regardless of how low the price.
Follow Aimee Picchi on Twitter at @aimeepicchi.
hope and change!
people making less money than when bush was in office, and paying higher taxes now too on less money. that definatly change!
nice one liberals
I WISH the market shills would STOP using the word 'recovery' until there actually is one.
(1) we don't believe a word you say
(2) we are not going to buy into the non-existent 'recovery'
(3) all the lies, swindles and data manipulation to make it appear as though there is a 'recovery' are not going to work, at least not on us.
so save the lies and misinformation/disinformation for another time, shill.
Yes the country has finally cheap skated themselves into paupers. The author cited lagging sales at Wal-Mart as though that were something to be concerned about. Idiots don't even realize that buying cheap foreign made goods from Wal-Mart is a very large part of the problem with the U.S. economy. That and the fact that the big wigs sent all the manufacturing jobs to China too. You dummies just kept voting for the same sellout politicians that paved the way for the tax codes to be stacked against the working classes,and the jobs to be sent out of country. So what are you gonna buy Chinese goods with? If you have no jobs then you have no money for extras like cheap Chinese junk. The truth is that the U.S.A. has been sold out for the interests of everyone but the people who live here.
Keep mentioning "recovery" and "end of recession"... I still won't believe it.
Hmm, pay CUT of 8% over last 2 years... CHECK
Higher gasoline prices, food prices and taxes... CHECK
Higher insurance, mortgage and utility prices... CHECK
Explain to me how my bills could go up 10% and my pay cut 8% that I'm "recovering"!
RECOVERY?????? What damn recovery?????? The one where fewer people are working than ever since the depression thanks to the socialist policies and programs of the socialist, aka Democrat, party. Put everyone on food stamps, government health care, government jobs, government phones, government housing and then LOOK OUT ! ! ! !
Once everyone stupid enough to fall for this tripe signs up and votes them into power continuously to keep the freebies coming, look out for the hammer heading for your HEAD. Then comes the time to TAX everything heavily to pay for it all.
Most people here do not remember the 90% tax rates we used to have when the Socialists (Democrats) had enjoyed unbridled power for so many years. Their tax and spend label is fitting because it is accurate. What many do not realize is that the TAXING can come later when you simply print the money you need to dole out freebies now under the guise of fixing something.
If you think you are better off now than you were 5 years ago, run your budget numbers now and compare it to 5 years ago and tell me, are you really better off??? Really, who do they think they are kidding. What is this summer, the 5th recovery summer in a row and we are still headed down the toilet.
And now, we have the wet blanket known as Obamacare stopping employers from hiring full time workers, cutting current full time staff to part time and dropping coverage for as many as they can. Give us a break and go back on vacation until 2017. At least that way you can't screw us any further.
"WASHINGTON (AP) - The average American household is earning less than when the Great Recession ended four years ago, according to a report released Wednesday.
U.S. median household income, once adjusted for inflation, has fallen 4.4 percent in that time, according to the report from Sentier Research. The report is based on an analysis of Census Bureau data.
The median, or midpoint, income in June 2013 was $52,098. That's down from $54,478 in June 2009, when the recession officially ended. And it's below the $55,480 that the median household took in when the recession began in December 2007.
The report says nearly every group is worse off than four years ago, except for those 65 to 74. Some groups have experienced larger-than-average declines, including blacks, young and upper-middle-aged people and the unemployed."
I think the math is not perfectly accurate in the calculation if they include people like me who is not able to get back to the job market due to sickness after laid off in 2009. For the past 4 years I only have about $200/yr of interest income so it will skew the math. I will need to recover my $110,000/yr income, but that is a dream I will never see again. I would be lucky if I will get hire.
There hasn't and isn't a recovery. Simple answer to the question why we still feel poor is because we are still poor if not poorer than we were a few years ago. What recovery..
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] The major averages ended the midweek session on a flat note after spending the day inside narrow ranges. The S&P 500 hovered near the 2,000 mark for the majority of the trading day, but slumped to new lows during the last hour of action. The index then returned to its flat line, where it settled for the day. For the third day in a row, participation left a lot to be desired with just 487 million shares changing hands at the NYSE.
Equity indices opened with slim gains, ... More
More Market News
The stock rises 9% after the company reveals strong second-quarter results.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'