U.S. Poverty Rate Jumps
The U.S. poverty rate rose for the first time in eight years and household income fell last year, a double dose of bad economic news that coincided with the first recession in a decade, the Census Bureau said Tuesday.
There were 32.9 million Americans living in poverty last year, up from 31.6 million in 2000. The rate of 11.7 percent was up from 11.3 percent the previous year, which was the lowest level since 1974.
The median household income in 2001 declined 2.2 percent to $42,228, the second straight drop, according to the bureau.
Separately, consumer confidence fell for the fourth consecutive month in September, slipping to its lowest level since November, a private research group reported.
Many analysts had predicted that the poverty rate — which is calculated annually by the Census Bureau — would rise in 2001 as unemployment rose and the economy slipped into recession.
The figures come from a survey of 50,000 households taken in March in response to questions about income and poverty.
Daniel Weinberg, chief of the Census Bureau's economic statistics division, said every region saw a decline in median household income except the Northeast, where it was flat.
Median income refers to the point at which half of households earn more and half earn less.
The poverty threshold differs by the size of the household. The bureau calculated that for a family of four, the level in 2001 was $18,104, up from $17,603.
The poverty rate rose for every racial group, while the median income fell.
Blacks had the highest poverty rate — 22.7 percent, up from 22.5 percent — and income fell from $30,495 to $29,470, the first decline in 19 years.
The poverty rate for whites increased from 7.4 percent to 7.8 percent, while income fell 1.3 percent, to $46,305.
Hispanics, which the Census Bureau classifies as an ethnic group rather than a racial category, had a slight decline in poverty — 21.5 percent to 21.4 percent — but income also fell, from $34,094 to $33,565.
On the consumer front, the New York-based Conference Board said its Consumer Confidence Index fell to 93.3 from a revised 94.5 in August. Analysts had been expecting a reading of 92.4.
The industry group's index, based on a monthly survey of some 5,000 U.S. households, is closely watched because confidence fuels consumer spending, which accounts for about two-thirds of the nation's economic activity.
The September reading signals conflicting emotions among consumers, said Lynn Franco, director of The Conference Board's Consumer Research Center.
"Weak labor market conditions continue to erode confidence," Franco said. "But while consumers are not as positive about current business conditions, they are more optimistic about the outlook than last month. Historically, this trend is prevalent during a recovery."
The index compares results to its base year, 1985, when it stood at 100.
In the past month, consumers have become more divided in their assessments of the present economic situation, but more optimistic about prospects for upcoming months, the Conference Board said.
Fewer consumers say they expect the economy to improve in the next six months, with the number falling to 21.5 percent from 22.2 percent last month. At the same time, the number expecting conditions to worsen also fell slightly, to 9.6 percent from 10 percent last month.
While the overall index fell, it was the smallest monthly decline since the downward trend began in June and was less than analysts had been expecting.