Data continue to point to a tepid economic recovery for the US rather than a dip into a second recession. The latest clue: Incomes were up for Americans in August, but only 0.5 percent.
Americans saw their incomes grow modestly in August, lending support to the view that the US economy will keep growing rather than falling back into recession.
Incomes rose by 0.5 percent for the month on average, although the gain was a more tepid 0.2 percent after adjusting for inflation. Spending rose in tandem, at a 0.4 percent pace, the Commerce Department said.
Many struggling households saw their incomes rise due to a resumption in federal aid for workers who have been unemployed for an extended time. (A lapse in those extended benefits helped to push personal incomes down in July.)
Still, family incomes are rising for other reasons as well. Private sector wages, small-business earnings, and rental-property income all rose in August. And gains in those areas have helped to push inflation-adjusted incomes up by 1 percent since January, on a per-capita basis.
That's not robust growth, but it's a key reason the economy has been growing. The Friday report on incomes comes as other recent indicators also align with this scenario of tepid growth, with no recession but not much momentum to spur employer hiring: