Shorts (left)
Big income losses for those near retirement
Americans nearing retirement age have suffered disproportionately after the financial crisis: Along with the declining value of their homes, which were intended to cushion their final years, their incomes have fallen sharply.
The typical household income for people 55 to 64 years old is almost 10 percent less in today’s dollars than it was when the recovery officially began three years ago, according to a report from Sentier Research, a data analysis firm that specializes in demographic and income data.
Across the country, in almost every demographic, Americans earn less today than they did in June 2009, when the recovery technically started. As of June, the median household income for Americans was $50,964, or 4.8 percent lower than its level three years earlier, when the inflation-adjusted median income was $53,508.
—Catherine Rampell, The New York Times
Manufacturing in China slows even further
HONG KONG — The Chinese economy, it seems, is stuck in a nasty rut.
A closely watched barometer of China’s economic performance — a monthly survey that measures the conditions in the giant manufacturing sector — slumped sharply in August, offering one of the earliest glimpses of how the month has been progressing. The prognosis, judging by a preliminary reading of the survey published Thursday, was poor.
The purchasing managers’ index, released by HSBC, sagged to 47.8 from 49.3 in July, the lowest level since late last year. That dashed hopes that conditions in the sector would stabilize, or even edge up slightly, during August. Analysts described the reading as “disappointing,” “alarming” and “just awful.” A reading below 50 indicates contraction; above 50 indicates growth.
“The unexpectedly big drop more than reversed the gain seen in July,” Yao Wei, a China economist at Societe Generale in Hong Kong, said in a research note. “A drop of this magnitude and a level significantly below 50 unambiguously spells trouble.”
—Bettina Wassener, The New York Times
New York Fed sells last of its AIG bailout bonds
The government is one step closer to shedding its burden from the financial crisis.
The Federal Reserve Bank of New York on Thursday sold the last of the risky bonds that were acquired as part of the 2008 bailout of the American International Group. In all, such sales generated $9.4 billion for taxpayers.
The deal “marks the end of an important chapter — our assistance to AIG — that was undertaken to stabilize the financial system in the midst of the financial crisis,” William C. Dudley, the New York Fed’s president, said in a statement.
While the government has reached another milestone in its efforts to unwind the bailouts, taxpayers are still responsible for the crisis-era programs. The Treasury Department owns a roughly 53 percent stake in AIG, which it is hoping to whittle down through a succession of stock sales. The government also owns big stakes in General Motors and Ally Financial.
“It’s mostly symbolic,” Henry T. C. Hu, a professor at the University of Texas School of Law, said of Thursday’s announcement. “It harkens back to this extraordinary intervention.”
Nearly four years later, AIG remains one of the most visible reminders of the crisis.
In 2008, the insurer nearly collapsed, prompting the government to provide a $182 billion lifeline.
—Michael J. De La Merced, The New York Times