The nation’s income dropped in August 2011, for the first time in nearly two years, according to a government report released last week. The drop was precipitated by a weak labor market and falling consumer confidence.
According to Reuters, “Weak incomes as employment growth ground to a halt and earnings fell hurt spending in August. Income slipped 0.1 percent, the first decline since October 2009, with private wages and salaries dropping $12.2 billion. Economists had expected income to edge up 0.1 percent. Consumer spending growth slowed sharply to a 0.7 percent annual pace in the second quarter after advancing 2.1 percent in the first three months of the year. Last month real spending on goods fell 0.2 percent, while services ticked up 0.1 percent. Disposable income was unchanged for the first time since September, but when adjusted for inflation fell 0.3 percent, the largest drop since October 2009.”