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Personal income declined in August for first time since 2009

September 30, 2011 |  9:41 am

Mall shopper
In another sign of Americans' economic struggles, personal income declined in August for the first time in two years, the Commerce Department reported Friday.

Growth in personal income -- an individual's total earnings, including wages and investments -- has been sluggish for months. But the drop of 0.1% from July to August was the first since October 2009. Personal income had risen 0.1% in July.

The drop was driven by a 0.2% decline in wages and salaries in August. The decrease of $11.8 billion was the largest since November, according to the department's Bureau of Economic Analysis.

Although people earned less money, they spent slightly more in August. Consumer spending rose 0.2% from July, although was flat when higher prices were taken into account. Consumer spending had risen 0.7% in July.

The new figures came after some mildly encouraging economic data on Thursday that indicated another recession might not be approaching. The data included an upward revision of second-quarter growth and a drop in weekly jobless claims.

RELATED:

U.S. data point away from another recession

Durable goods orders fall in August, but some signs are positive

No new jobs added in August as unemployment rate holds at 9.1%

-- Jim Puzzanghera

Photo: A shopper in Los Angeles. Credit: Associated Press.

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