New York Times had a great story on an airline pilot whose income has been slashed by half due to a demotion. The article captures what the family is enduring on so many levels. Their story is not an exception. In fact, many American families find themselves economically devastated as a direct result of the recession.
Here are some data from our survey on what American households expect their income to be in 2009 (compared to 2008). 47% of Americans expect their income to drop, with about a third saying it will decline by more than 10%. (See chart 1.)
Chart 1
Also, only a third are highly certain about their income in 2010. (See chart 2.)
Given these income expectations among American consumers, it will take a while before they go back to spending the way they did in the past. What matters most is the economy within households for economic recovery to be meaningful. We will likely not see this for a long time, based on the data we are seeing from our survey and other sources.
Chart 2
interesting take on the subject, count me as a new subscriber!