Annual incomes in the United States have dropped sharply in recent years, and near-retirees are getting hit the worst.
That's the conclusion of a new study by Sentier Research, which looked at the trend in median U.S. household incomes since 2000.
Twelve years ago, after adjusting for inflation, the median household in the United States earned about $55,000 per year, reports Catherine Rampell of the New York Times, citing Sentier's data.
Now, the median income has fallen to about $51,000.
The two age-groups that have been hit the worst in this period are households led by those in the 55-64 age group and those in the 25-34 age group. The incomes of the near-retirees have fallen by nearly 10% in the past three years.
This data explains why our economic recovery is so sluggish.
The problem with the US economy is not that the richest Americans and companies don't have enough money to invest or that "regulations" or "uncertainty" is discouraging investment. The problem is that the primary customers in the US economy, average American households, are losing ground fast.
When a company's customers are suffering, the company will suffer--no matter how much cash it has available to invest.
The American consumer spends most of the money that is spent in the US economy. And that money becomes revenue for companies. So when the average American consumer is weak, the whole economy is weak, and that's exactly the situation we're in now.