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In the Balance - Issue 2

In the Balance - Issue 2

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Short essays related to research on understanding and strengthening the balance sheets of American households.
Short essays related to research on understanding and strengthening the balance sheets of American households.

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Categories:Types, Research
Published by: Federal Reserve Bank of St. Louis on Jan 29, 2013
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07/29/2013

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Issue 2 |
2012
Perspectives on Household Balance Sheets
Unsteady Progress: Income Trends in theFederal Reserve’s Survey of Consumer Finances
householdfinancialstability
—A Research Initiative
Thi analyi f th Fdral Rrv’srvy f Cnmr Financ i bt napct f a rcntly lanchd rarchinitiativ nw ndr way at th FdralRrv Bank f st. Li. Thrghrarch, pblicatin, wb-bad datatl and pblic vnt, th HFs initiativaim t hlp rbild th balanc htf trggling Amrican hhld. Frmr infrmatin,  th HhldFinancial stability it atwww.tlifd.rg/hf
1
T
he Federal Reserve’s 2010 Survey oConsumer Finances revealed a declinein the income o many Americans between 2007 and 2010.
1
 Among the middle decile (10 percent)o all amilies, the average pre-tax amilyincome in 2010 was $45,951, alling 5.6percent rom the 2007 level o $48,669.
2
 (All fgures are expressed in terms o 2010purchasing power.)Detailed comparisons o income andwealth trends over both short and longperiods or a number o subgroups lead usto conclude that some types o amilies aredoing noticeably better than others.
3
For example, the average older amily(headed by someone 55 or older) in themiddle ten percent o such amilies had apre-tax income 3.5 percent higher in 2010than a similar amily had in 2007.In stark contrast, the average youngeramily (headed by someone under 40) hada pre-tax income 12.6 percent lower in2010 than in 2007.Meanwhile, a amily headed by someone between the ages o 40 and 54 had pre-taxincome that was about 8.3 percent lower in2010 than such a amily in 2007.
Short- and Longer-Term Income Trends
Table 1 provides inormation on typicalpre-tax amily incomes at various times or
TABLE 1
Average family income of the middle decile of families ranked by income in 2010 dollars
(continued on Page 2)
souRCe: Fdral Rrv srvy f Cnmr Financ and athr’ calclatin.
By William Emmons, assistant vice president and economist, and Bryan Noeth, policy analyst,Federal Reserve Bank of St. Louis
1992-95 average20072010Percent Change2007-2010Percent Change1992-95 average to 2010
1
All famili$41,990$48,669$45,951
–5.6
9.4
2
Hitrically diadvantagd minrity(African-Amrican r Hipanic rigin)25,55734,91732,306
–7.5
26.4
3
Whit, Aian r thr minrity46,56954,81552,221
–4.7
12.1
4
Yng (family had ndr 40)40,78745,58339,834
12.62.35
Middl-agd (btwn 40 and 54)59,41664,76359,373
8.30.16
old (55 r ldr)29,61340,68642,0903.542.1
7
Ncllgdgr32,24536,36334,121
–6.2
5.8
8
Cllgdgr(tw-yar r fr-yar dgr)66,30382,84473,502
–11.3
10.9
Addendum:
9
Middl-agd and cllg dgr and whit,Aian r thr minrity83,17797,05199,3342.419.4
1 0
old and cllgdgrand whit, Aian r thr minrity66,56488,13174,558
–15.4
12.0
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