Median U.S. family income, adjusted for inflation, was $58,407 in 2006, according to the most recent Census Bureau data, down from $59,398 in 2000. Competition from low-wage countries such as China, combined with the waning power of organized labor, kept a lid on compensation during the latest expansion. Now, as prices pick up, the deterioration in income growth means households are likely to cut spending, restraining the economy. Economists don’t anticipate annualized growth to breach 2 percent until the third quarter of 2009, according to a monthly Bloomberg News survey. The Labor Department reported July 16 that consumer prices jumped 5 percent in the year to June, the most in 17 years. That pushed the so-called Misery Index, which adds inflation to the unemployment rate, to 10.5, a level unseen since 1993, the year Democrat Bill Clinton was inaugurated as president after campaigning on promises to revive the economy. More
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