10 October 2011

Household Income and GDP Diverge

Chart via the Calculated Risk story linked below

In Colorado, and nationally, the recession, measured as the period during which GDP declines, ended in 2009, but household income continued to fall during the so called recovery and the growth in employment from its low point has been slight.

Between June 2009, when the recession officially ended, and June 2011, inflation-adjusted median household income fell 6.7 percent, to $49,909, according to a study by two former Census Bureau​ officials. During the recession — from December 2007 to June 2009 — household income fell 3.2 percent.

The combined drop in household income, nationally, has been 9.8% for the recession and "recovery" combined. Unemployment fell from 9.5% to 9.2% in the recovery period.

It isn't entirely clear where the GDP growth is going. But, it isn't trickling down to households, so perhaps corporations are making gains instead.

The linked story doesn't make it clear, but the study referenced is actually about median household income, which makes its causes a bit more clear. The middle has been continuing to suffer during the "recovery" at the expense of those who are better off.

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