Income

Barry Ritholtz has a great post up about income and employment. You can guess what it says:



Barry quotes the IRS:

"Americans earned a smaller average income in 2005 than in 2000, the fifth consecutive year that they had to make ends meet with less money than at the peak of the last economic expansion, new government data shows.

While incomes have been on the rise since 2002, the average income in 2005 was $55,238, still nearly 1 percent less than the $55,714 in 2000, after adjusting for inflation, analysis of new tax statistics show.

The combined income of all Americans in 2005 was slightly larger than it was in 2000, but because more people were dividing up the national income pie, the average remained smaller. Total adjusted gross income in 2005 was $7.43 trillion, up 3.1 percent from 2000 and 5.8 percent from 2004. . ."

And remember, the adjusted for inflation part is based on the government's measures of inflation, which are suspect to say the least.

Barry doesn't mention it, but averages are funny things. I don't have the data, but I do know that the rich have been getting richer. So for the average to even stay above water someone has to be doing worse. The spread from wealthy to poor has increased. Thus far, average Americans have made up the difference with credit. That can't go on forever.

Added: Bonddad on a weak report of retail sales:

According to the report, high-end companies and discounters did well. Back to school sales (read teenagers) weren't around at all. At least not yet.

70% of the economy is not happy about what is happening in the economy and they are showing it through their wallets. Remember in the last GDP report personal consumption expenditures increased 1.5% -- one of the smallest gains during this expansion. If we see more numbers like this, we can probably expect a repeat of numbers like that.