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Income Dynamics - 9/29/15

Despite the fact that the nation’s unemployment rate is down to five point one percent, three are many people who consider the U.S. economy to still be in terrible shape.  Undoubtedly, there are many reasons for this, but no explanation seems as powerful as those related to income dynamics. 

The U.S. Census Bureau recently released new data regarding incomes.  Last year, the median American household had a lower income in inflation adjusted terms than it did in twenty thirteen.  The median American household registered income of approximately fifty three thousand six hundred and sixty dollars, down one and a half percent from the year before.  The Census reported that that change was not a statistically significant one, however. 

Here’s what’s arguably more remarkable.  Inflation adjusted income in twenty fourteen was nearly seven percent below its two thousand and seven, pre-crisis level.  As indicated by writer Neil Irwin, it is seven point two percent below the figure for nineteen ninety nine.  Twenty fifteen may turn out to be better, not because wages are rising rapidly, but because energy prices have fallen, which may be producing a temporary increase in inflation adjusted incomes.

Anirban Basu, Chariman Chief Executive Officer of Sage Policy Group (SPG), is one of the Mid-Atlantic region's leading economic consultants. Prior to founding SPG he was Chairman and CEO of Optimal Solutions Group, a company he co-founded and which continues to operate. Anirban has also served as Director of Applied Economics and Senior Economist for RESI, where he used his extensive knowledge of the Mid-Atlantic region to support numerous clients in their strategic decision-making processes. Clients have included the Maryland Department of Transportation, St. Paul Companies, Baltimore Symphony Orchestra Players Committee and the Martin O'Malley mayoral campaign.