A recent survey conducted by data intelligence company Morning Consult has revealed an alarming increase in the number of US households experiencing declining incomes. According to the survey, the share of households facing a drop in their incomes rose from 10.7% in August to 11.8% last month. The rise in declining incomes was particularly notable among high- and middle-income families in the West region of the United States.
The survey also highlighted concerns about future income prospects, with about 20% of adults polled who earn $100,000 or more annually reporting that they expected their incomes to decrease in the next four weeks. This indicates a growing unease about the stability of the labor market and the overall economic situation.
Another concerning finding from the survey was the decline in the number of employees working over 35 hours. This figure fell to 46.7% in the surveyed period, representing a 12% drop from September 2022. This decline in working hours signals a slowdown in US business activity and suggests that soft business conditions are the most cited reason by respondents.
These findings come at a time when US inflation-adjusted household income has experienced its largest decline in twelve years. The economic impact of the Covid-19 crisis and the expiration of pandemic-era programs have taken a toll on household finances. The US Census data released last month revealed the extent of this impact, with child poverty more than doubling following the expiry of pandemic-era child tax credits. These figures, coupled with the worst inflation in 40 years, have significantly eroded household spending power.
The survey by Morning Consult serves as a stark reminder of the ongoing challenges faced by many American households. The weakening labor market, coupled with rising inflation and the expiration of support programs, has left a growing number of families with declining incomes. The consequences of this trend are far-reaching, affecting not only individuals but also the overall health of the US economy.
Efforts to address these issues must focus on stimulating economic growth and ensuring that the labor market remains robust. Additionally, measures need to be taken to alleviate the impact of inflation on household finances and provide targeted support for struggling families. Only through a comprehensive approach can the adverse effects of the current economic climate be mitigated and the prosperity of American households restored.
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