Most households spent more last year amid larger paychecks. But one cohort was left behind.
Households among the bottom 20% saw their average annual income drop 2.2% to $11 335 in the 12 months ending June 2018 from a year prior, according to data from the Bureau of Labor Statistics.
As income dropped, these households also cut back on consumption and spent 0.5% less than the prior year. Still these households with lower income were spending more than they earned, signaling the draw down of savings from a large number of retirees and to a lesser extent the taking on of additional debt.
The other 80% of households experienced rising income, with the top quintile of households seeing the highest gains at 5%.
The lowest quintile of workers also spent the highest share of income on food and housing. As household incomes increase, a smaller share of money was allocated to the basic necessities. The top earning households distributed the greatest share of income to pensions and personal insurance.