Here's why early tomorrow morning, Sydney time, the US Federal Reserve is widely expected to reveal plans to either spend more to try and boost US economic activity, or allow interest rates to remain at their current record lows for another year -- into 2015: US poverty remains endemic, real median income is falling (and is at a 16-year low), consumers continue to delever, and there's little sign of that changing on its own.
The data also makes you wonder if the current high level of US sharemarkets (the highest since 2007) and corporate profits are a house of cards, based as they are on very weak support with millions of Americans unemployed, under-employed or just vanished from the labour force. The US jobless rate was 8.1% in August; more than 12.5 million people were unemployed and 5 million of those were long-term unemployed. As well 10 million other people are either working a few hours a week, or looking for work. Data out earlier this year shows about 46 million Americans are receiving food stamps to help them eat each week.
Figures from the US Census Bureau in a report released overnight showed there were 46.2 million Americans in poverty in 2011, The poverty rate was 15%, down from 15.1% in 2010. The cut-off for the poverty rate is an annual income of about $US23,000 a year. That's one in every seven people still in poverty. And America's median income has fallen to its lowest level in more than a decade, hardly the stuff of a vibrant, growing economy. The continuing high level of unemployment, ongoing home foreclosures and weak economic growth are some of the factors behind this gloomy report, as well as the country's high debt, deficit and the millstone of political gridlock in Washington and in many states.