Analysis: An end to the Iran war may be just the beginning of a new era of U.S. inequality
The U.S. economy is facing challenges as the effects of the Iran war continue to impact purchasing power and savings rates. While corporate profits are rising, the share of income going to labor has dropped to its lowest level in 79 years. The potential for a new agreement with Iran could affect oil prices, but the long-term implications for inequality remain uncertain.
- ▪Americans' real disposable income fell by 0.2% in March and 0.5% in April.
- ▪The personal savings rate hit a low of 2.6% last month.
- ▪Labor's share of gross domestic income has decreased to 51%, the lowest in 79 years.
- ▪An average American has spent an extra $447.19 on energy costs since the war began.
- ▪The average cost of a gallon of gas recently declined by 16 cents to $4.39.
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A slew of new economic data shows the U.S. economy struggling to shrug off the effects of the war. Americans' purchasing power is falling, according to data released Thursday by the Bureau of Economic Analysis. Americans' real disposable income fell 0.2% in March and another 0.5% in April. Americans are getting through the energy crunch due to the war by slashing savings. The personal savings rate hit a dismal 2.6% last month, U.S. Bureau of Economic Analysis data showed. Growth in the first quarter was revised downward to just 1.6%. But the economy hasn't stalled out, in part because of that disconnect between the top and bottom halves of the population. Big U.S. companies are doing just fine — that, after all, is what makes up the S&P 500.
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