U.S. income inequality narrowed slightly over last three years: Fed By Reuters

© Reuters. U.S. dollar banknotes lie on a table in this picture illustration taken in Warsaw

By Howard Schneider and Jonnelle Marte

WASHINGTON (Reuters) – Income inequality in the United States narrowed in the first three years of the Trump administration as rising wages and a low unemployment rate fueled gains for lower-income and less educated families, according to U.S. Federal Reserve data released on Monday.

Wealth inequality was largely unchanged, with the top 10% of families holding about 71% of family wealth in 2019, roughly the same as in 2016, the Fed found in its latest Survey of Consumer Finances, conducted every three years.

The survey provides a snapshot of how income, assets and debt are distributed across the population, and in this case how the benefits of the final years of a decade-long economic expansion had begun flowing to typically less advantaged parts of the population.

Median family net worth by race: https://graphics.reuters.com/USA-FED/FAMILIES/oakveexnbvr/chart.png

Most of the survey was conducted last year, before the coronavirus pandemic ended that expansion and pushed the United States into a recession that may endanger some of the very gains documented in the report.

But the data did reflect a pause at least in the long trend toward wealth and income becoming more concentrated in the upper end. Overall, for example, average incomes fell, but that was driven by a decline in incomes among the top earners.

Excluding the richest 1% of families, average incomes rose about 3.1% between 2016 and 2019.

The same dynamic was behind the 6% decline in average income for whites, from $133,000 to $122,000. White families are disproportionately represented among the ranks of the top earners, but Fed economists said their incomes can also be more volatile because they are more dependent on the proceeds of private businesses or dividends and gains from asset holdings.

Although the top 10% retained a steady share of wealth, the period did see some reshuffling among the rest of the population.

Those in 25th to 50th percentiles saw wealth gains of 36% over the period, attributed by the Fed to rising rates of home ownership and increased stock holdings.

While the net worth of those in the bottom quartile also increased, that one-fourth of American families still held just 0.3% of family wealth.

There were proportionately larger gains in wealth as well for Black and Hispanic families, the Fed said. Median net worth rose 33% for Black families and 65% for Hispanic families, compared with a 3% gain in the median for white families. However the absolute gap remained large: the median net worth for white families, at $188,200, was nearly eight times that of the $24,100 median for Blacks, and over five times that of the $36,100 of Hispanic families.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

{n.callMethod? n.callMethod.apply(n,arguments):n.queue.push(arguments)};
s.parentNode.insertBefore(t,s)}(window, document,’script’,
fbq(‘init’, ‘751110881643258’);
fbq(‘track’, ‘PageView’);

by : Reuters

Source link

Capital Media

Read Previous

How the airline industry recovers from COVID-19 could determine who gets organ transplants

Read Next

La Fintech nigériane Paga quitte l’île Maurice pour la Grande-Bretagne