Friday, April 11, 2014

Uneven Income Gains in U.S. Economic Recovery

The Bureau of Labor Statistics (BLS) published an analysis of consumer expenditures across income groups before and after the Great Recession. They found that income gains and expenditures were unevenly distributed across socioeconomic groups.

In 2011, average household income (not adjusted) in the U.S. returned to the previous peak level in 2008. In 2012, unadjusted average household expenditures surpassed the 2008 level. 

While these averages have regained the ground they lost, U.S. households in different socioeconomic groups had distinctly different income experiences after 2008. The BLS divided households into five quintiles -- five equally sized groups divided from lowest to highest according to their annual income. The BLS reported that from 2008 to 2012, the top one-fifth of households accounted for more than 80 percent of all household income gains nationwide. At the same time, the lowest quintile saw a slight decrease in household income. The second-lowest and middle quintiles saw essentially no change in household income.

The highest quintile of households, which had the most income gains, also increased expenditures by roughly $2,300 between 2008 and 2012. These high-income household expenditures grew most for health care, transportation, and education. The lowest quintile of households generally decreased spending by $150 over these same years. The largest expenditure declines occurred for apparel, entertainment, and housing.

You can find more information -- and several graphics! -- in the BLS summary slide show.

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