Business
U.S. paychecks diminish in power and size
New York | May 10, 2008 12:01:13 AM IST
Shrinking jobs and less potent paychecks are cutting into consumer spending in the United States, economists say. The downturns are seen in the rise of unemployment -- from 4.8 percent to 5.1 percent -- and a reduction in work hours from 33.9 per week in March 2007 to 33.8 per week in March 2008, The New York Times reported Friday. The power of the paycheck is also fading with incomes failing to keep abreast of inflation for six consecutive months, the report said. It means spending slows going forward, Robert Barbera, an economist at ITG told the Times. If we go to town now, it's for a reason, said Kim Baker, whose paycheck from a roof tile factory in Ohio has declined by $150 a week this year. Max Garcia, an independent computer serviceman, told the Times his income has been cut 50 percent since November. Consumer spending accounts for two-thirds of the U.S. economy, but smaller checks that don't go as far put spending on hold. Everybody's getting tighter, Garcia said. We spend more time at home. We don't drive anywhere we don't have to. (UPI)
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