Recession in U.S. Weighed on Incomes, Marriage, Teen Employment

The worst U.S. recession since the Great Depression last year hurt almost every part of American life, from household finances to marriage rates and teenage employment, according to Census Bureau figures.

Median household income fell in 34 states, led by Michigan and Florida, up from eight with declines the year before, the Census Bureau said yesterday in its annual American Community Survey. Maryland had the highest income for a fourth consecutive year, at $69,272, even as its median dropped from $70,545 in 2008.

The 18-month recession, which ended in June 2009, led to the loss of more than 8.4 million jobs, drove the unemployment rate close to a 26-year high and contributed to a 26 percent decline in the median home price. Consumer spending, which accounts for about 70 percent of the economy, last year declined the most since 1942.

“Some of the impacts that we see are going to be temporary,” said Audrey Singer, a senior fellow at Brookings Institution in Washington. “Once the recovery really gets under way, we may see a lot of positive changes, especially the employment figures and household income.”

Household income in Michigan fell 6.2 percent to $45,255, adjusted for inflation, and Florida followed with a decrease of 5.7 percent, to $44,736, the bureau said.

North Dakota was the only state where incomes rose. The state’s median climbed 5.1 percent to $47,827, the eighth straight annual gain. Fifteen states and the District of Columbia showed changes that were statistically insignificant, the bureau said.

Mississippi Is Lowest

Nationally, median household income fell 2.9 percent in 2009 to $50,221, the second straight annual drop, the Census Bureau said. Mississippi had the lowest income for at least the fifth straight year, at $36,646.

The recession “hammered the economy and engulfed every state,” said Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. “We’re light years away from gaining jobs.”

The recession hurt more than half of Americans, especially younger people, minorities and those with a high school education or less, according to a Pew Research Center survey released last week. The report found that 55 percent of Americans faced challenges such as unemployment, delinquent mortgage or rent payments, shrinking paychecks or shattered household budgets, and sometimes a combination of those.

The labor-force participation rate for teenagers fell to 40.6 percent last year from 43.8 percent in 2008, according to the Census data. The percentage of teens not enrolled in school or working increased to 5.6, from 5.3 the previous year.

Teenage Unemployment

The unemployment rate for teenagers in October 2009 climbed to 27.6 percent, the highest since record-keeping began in 1948, according to the Labor Department.

“This unemployment rate among youth and new entrants into the labor market may have a longer-term effect depending on how the recovery goes for that age group,” Singer said.

For Americans a few years older, the recession may have had an impact on one area outside of work: marriage. An analysis of the Census data by the Population Reference Bureau, a Washington-based research organization, found that for the first time in more than 100 years of record-keeping, the proportion of unmarried Americans aged 25-34 was higher than those who are married.

The American Community Survey data are used to help determine the annual distribution of more than $400 billion in federal and state funds, the bureau said.

To contact the reporters on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net; Alexandra Harris in New York at Aharris48@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

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