The Conference Board Consumer Confidence Index, which had increased in August, declined in September. The Index now stands at 86.0 (1985=100), down from 93.4 in August. The Present Situation Index decreased to 89.4 from 93.9, while the Expectations Index dropped to 83.7 from 93.1 in August.
Says Lynn Franco, director of Economic Indicators at The Conference Board: “Consumer confidence retreated in September after four consecutive months of improvement. A less positive assessment of the current job market, most likely due to the recent softening in growth, was the sole reason for the decline in consumers’ assessment of present-day conditions.
“Looking ahead, consumers were less confident about the short-term outlook for the economy and labor market, and somewhat mixed regarding their future earnings potential. All told, consumers expect economic growth to ease in the months ahead.”
From New Strategist Publications
The $51,939 median household income of 2013 was not significantly different from the $51,758 of 2012, after adjusting for inflation. This is the second year in a row of no significant change in median household income, according to the Census Bureau, following two years of decline.
Median household income in 2013 was 8.0 percent below the median of 2007 (the Great Recession officially began in December 2007), after adjusting for inflation. But 2007 was nothing special as far as median household income is concerned because the median had peaked years before that--all the way back in 1999 at $56,895. Median household income in 2013 was 8.7 percent below that all-time high.
Median Household Income (in 2013 dollars)
1999: $56,895 (all-time high)
What Happened to Peak Earners?
Median household income peaks in the 45-to-54 age group. But the peak is smaller than it once was because middle-aged Americans have lost so much ground over the years, according to the Census Bureau's Current Population Survey.
In 1999, the year when the nation's median household income reached its all-time high, the median income of households headed by 45-to-54-year-olds was 40 percent greater than the overall median: $79,550 versus $56,895 (in 2013 dollars). Today, however, the median income of householders aged 45 to 54 is just 29 percent greater than the overall median: $67,141 versus $51,939.
Between 1999 and 2013, the median income of householders aged 45 to 54 fell by a stunning 15.6 percent – a loss of more than $12,000. Here is median household income by age of householder in 2013 (and percent change since the peak year of 1999; in 2013 dollars).
Median Household Income
Total households: $51,939 (-8.7%)
Under age 25: $34,311 (-2.4%)
Aged 25 to 34: $52,702 (-10.4%)
Aged 35 to 44: $64,973 (-8.5%)
Aged 45 to 54: $67,141 (-15.6%)
Aged 55 to 64: $57,538 (-7.9%)
Aged 65-plus: $35,611 (+11.7%)
40% Decline in Wealth – 2007 to 2013
More bad news: Americans are still reeling from the Great Recession, according to findings from the 2013 “Survey of Consumer Finances.” Median household net worth fell 40 percent between 2007 and 2013, after adjusting for inflation. Most of the decline occurred between 2007 and 2010, but net worth continued to drift down between 2010 and 2013.
Median Household Net Worth (in 2013 dollars)
Many households experienced double-digit declines in net worth between 2010 and 2013, after adjusting for inflation. Households headed by people aged 45 to 54, for example, saw their net worth fall by an additional 17 percent during those years, following a 39 percent decline between 2007 and 2010. Other household segments with double-digit declines in net worth between 2010 and 2013 were those headed by people 55 to 64, aged 75 or older, without a high school diploma, with only some college, and the broad segment “nonwhites or Hispanics.”
— Cheryl Russell
New Strategist Publications