A surge in the number of American adults whose incomes have fallen in recent weeks is causing Americans to lose their ability to spend, a sign of labor market weakness.
Morning Consult's survey of the U.S. labor market showed that the share of households facing declining incomes rose to 11.8 percent in September from 10.7 percent in August. This growth was primarily driven by high - and middle-income households and the Western United States. About 20% of respondents (those with annual incomes of $100,000 or more) said they expect their income to decline over the next four weeks. The percentage of employees reporting more than 35 hours per week fell to 46.7%, down 12% from September 2022, the lowest decline since the spring of 2021, indicating a slowdown in U.S. business activity. The most cited reason was weak business conditions.
At the same time, inflation-adjusted household income in the United States fell by the most in 12 years in 2022, underscoring the toll of rising living costs.