Households among the bottom 20 percent saw their average annual income drop 2.2 percent. (Photo: Shutterstock)
(Bloomberg) — Most households spent more last year amid larger paychecks. But one cohort was left behind.
Households among the bottom 20 percent saw their average annual income drop 2.2 percent to $11,335 in the 12 months ending June 2018 from a year prior, according to data from the Bureau of Labor Statistics.
As income dropped, these households also cut back on consumption and spent 0.5 percent less than the prior year. Still these households with lower income were spending more than they earned, signaling the draw down of savings from a large number of retirees and to a lesser extent the taking on of additional debt.
The other 80 percent of households experienced rising income, with the top quintile of households seeing the highest gains at 5 percent.
The lowest quintile of workers also spent the highest share of income on food and housing. As household incomes increase, a smaller share of money was allocated to the basic necessities. The top earning households distributed the greatest share of income to pensions and personal insurance.
READ MORE:
Copyright 2019 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.
Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
