Americans in 37 states see income fall

06.18.09
By Sarah Beldo

Although there are signs that the volatile job market could slowly be stabilizing, the repercussions of widespread layoffs are still being felt across the country.

Recent figures from some of the nation's major lenders indicate that uncollectible credit card debt is still a significant problem, while separate data shows more people are late with their mortgage loan payments. Foreclosure filings remain high as well.

Now, new statistics from the U.S. Bureau of Economic Analysis demonstrate how job losses are affecting Americans' personal incomes.

Income dropped by 0.5 percent in the first quarter of the year, with 37 states seeing declines, according to the bureau. This compares to the 0.4 percent decrease seen in the fourth quarter of 2008.

Job losses and low interest rates set by the Federal Reserve were two of the largest factors that brought incomes down, the report states.

A total of six states saw incomes drop more than 1 percent during the period, including some Plains states - North Dakota, Missouri and Iowa - which saw farm income impacted by lower commodity prices.

Meanwhile, Hawaii and Virginia saw some of the largest increases, largely due to pay raises within the federal civilian and military sector.

The bureau notes that the overall declines were offset by inflation and moderated somewhat by an increase in unemployment benefits for laid-off workers, as well as a cost-of-living adjustment for seniors and pay increases for government employees.

Despite the negative figures, a separate report suggests there could be a sunnier outlook around the corner.

Today, the Conference Board said its leading economic index rose for the second month in a row, which hints that economic recovery could be imminent.

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Job losses are affecting Americans' personal incomes.