Income Gap in U.S. Widens Post-Recession

Reuters  |   September 7, 2014

In the years since the recession ended, the income gap between the wealthiest Americans and the rest of the nation has widened, according to a new report from the Federal Reserve.

Housing Hangs on Income Growth

Though the average income for U.S. families increased about 4 percent (accounting for inflation) between 2010 and 2013, nearly all of that growth was concentrated among the top earners — particularly the top 3 percent— according to the report. The top 3 percent held 54.4 percent of all net worth in 2013, up from 51.8 percent in 2007 and 44.8 percent in 1989.

Fed Chair Janet Yellen has called income inequality a disturbing trend, which she attributes to the weak employment market.

That said, overall Americans' wealth stabilized from 2010 to 2013 after having fallen sharply during the three years prior. The Fed attributed part of those declines to falling home values at the time, but they have been rising the last few years as the housing market recovers.

Nevertheless, the aftermath of the financial crisis still lingers on for all income levels. Even though incomes of the highest earners increased, none of the groups analyzed by the Fed had regained their 2007 income levels by 2013.

Source: Reuters