U.S. incomes falling, poverty rate rising

The annual income of middle-class Americans fell by almost $500 last year and the number of people in poverty rose by 1.7 million, the Census Bureau reported Friday, showing the lingering effects of the country's long economic downturn and suggesting the political trouble that may lie ahead for President Bush.

The Census data marked the second consecutive year of such discouraging trends after nearly a decade of continuous improvement. The rise in those classified as living in poverty suggested that the damage of the 2001 recession was finally beginning to reach low-income groups, which had been surprisingly resistant to its ill effects.

Separately, the government said Friday that the U.S. economy grew at a 3.3 percent annual rate from April through June, slightly faster than the 3.1 percent rate it had previously estimated and its fastest pace since last fall. Higher growth usually increases income and reduces poverty, but with employers still slashing payrolls, it is unlikely that has happened yet.
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  thanks to Counterspin Central