#Recession Road: Declining incomes for Americans

By Jia Lynn Yang and and Erica W. Morrison

The personal income of Americans dropped for the first time in two years in August, according to government figures released Friday, forcing people to dip into their savings to cover their spending.
The drop in earnings is just one more sign that the country’s stalling economy is straining families — and it’s consistent with a generally bleak picture for American workers whose wages have remained stagnant since 2001.
Personal income fell 0.1 percent in August compared with the month before, the first decline since October 2009, the government said. As a result, Americans tapped their reserves, dropping the personal savings rate to its lowest point since December 2009, or 4.5 percent. Meanwhile, spending remained flat, when adjusting for inflation.
The trend is rooted in the country’s nagging unemployment problem, analysts said. No new jobs were created in August, keeping the unemployment rate stuck at 9.1 percent.
Declining incomes for Americans >