clear
Wednesday September 2nd, 2015 4:34AM
12:04AM ( 4 hours ago ) News Alert
Pedestrian struck, killed at Banks Crossing
The Georgia State Patrol confirms a pedestrian died after being struck by a large truck at Banks Crossing Tuesday night.

AP survey: US income gap is holding back economy

By The Associated Press
WASHINGTON (AP) -- The growing gap between the richest Americans and everyone else isn't bad just for individuals.

It's hurting the U.S. economy.

So says a majority of more than three dozen economists surveyed last week by The Associated Press. Their concerns tap into a debate that's intensified as middle-class pay has stagnated while wealthier households have thrived.

A key source of the economists' concern: Higher pay and outsize stock market gains are flowing mainly to affluent Americans. Yet these households spend less of their money than do low- and middle-income consumers who make up most of the population but whose pay is barely rising.

"What you want is a broader spending base," said Scott Brown, chief economist at Raymond James, a financial advisory firm. "You want more people spending money."

Spending by wealthier Americans, given the weight of their dollars, does help drive the economy. But analysts say the economy would be better able to sustain its growth if the riches were more evenly dispersed. For one thing, a plunge in stock prices typically leads wealthier Americans to cut sharply back on their spending.

"The broader the improvement, the more likely it will be sustained," said Michael Niemira, chief economist at the International Council of Shopping Centers.

Income inequality has steadily worsened in recent decades, according to government data and academic studies. The most recent census figures show that the average income for the wealthiest 5 percent of U.S. households, adjusted for inflation, has surged 17 percent in the past 20 years. By contrast, average income for the middle 20 percent of households has risen less than 5 percent.

The AP survey collected the views of private, corporate and academic economists on a range of issues. Among the topics were what policy decisions, if any, the Federal Reserve might announce after it ends a policy meeting Wednesday.

Three-quarters of the economists surveyed don't think the Fed is ready to announce a pullback in its economic stimulus. Speculation has been rising that the Fed will soon scale back its $85 billion in monthly bond purchases because of the economy's steady gains. The bond purchases have been intended to keep long-term loan rates low to induce people to borrow and spend.

Among the majority of economists who think the Fed will maintain its pace of bond buying for now, the largest group think a pullback will begin at its next meeting in late January.

Most of the economists don't think the economy needs the Fed's help. Just over half say they believe growth could reach a healthy 3 percent annual pace even without the Fed's bond buying.

Several predicted that U.S. economic growth will pick up as the effects of tax increases and government spending cuts that kicked in this year dwindle.

As Janet Yellen prepares to succeed Ben Bernanke as chairman early next year, most of the economists expect the Fed to become more "dovish" - that is, more focused on fighting unemployment than on worrying about higher inflation that might result from the Fed's actions. The Senate could confirm Yellen as soon as this week.

Among the economists' other views:

- The economic recovery, which officially began 4 1/2 years ago, has yet to reach its high point. And nearly all think the next recession is at least three years away; half think it's at least five years away. The economists forecast that growth will average 2.9 percent in 2014. That would be the healthiest annual pace since 2005.

- The Obama administration's health care law will make little or no difference to the job market. About two-fifths said the law would cost jobs. None said it would increase hiring. The law has drawn fierce opposition from many small business owners, who say it will raise hiring costs by requiring companies with 50 or more employees to provide coverage starting in 2015.

- The stock market isn't in a bubble. While the Dow Jones industrial average reached record highs earlier this year, most economists said that higher profits largely justified the gains.

- Europe will keep growing and avoid a recession in 2014. But growth will remain so tepid that inflation will co nearly non-existent. Nearly two-thirds of the economists forecast that inflation won't consistently reach the European Central Bank's inflation target of 2 percent until 2016.

- Inflation in the United States will remain low for the long run. A majority of economists think consumer inflation won't consistently meet or exceed the Fed's 2 percent target level until 2015 or later.

Economists appear to be increasingly concerned about the effects of inequality on growth. In a speech this month, President Barack Obama declared inequality the "defining challenge of our time."

Brown, the Raymond James economist, says analysts used to debate whether inequality was worsening.

Now, he says, "there's not much denial of that ... and you're starting to see some research saying, yes, it does slow the economy."
© Copyright 2015 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
S&P 500 index has its best year since 1997
The stock market closed out a record year with more all-time highs on Tuesday, giving U.S. indexes their biggest annual gains in almost two decades.
6:56PM ( 1 year ago )
Colorado readies for 'Green Wednesday' pot sales
Police were adding extra patrols around pot shops in eight Colorado towns that plan to allow recreational sales to anyone over 21 on Jan. 1.
1:52PM ( 1 year ago )
Kerry seeks framework for Mideast peace talks
A senior State Department official says Secretary of State John Kerry will try this week to get Israel and the Palestinians to agree on a framework for negotiating a final peace agreement, yet cautions against raising expectations for Kerry's latest round of shuttle diplomacy.
1:35PM ( 1 year ago )
U.S. News
Missing Ga. bank director arrested in Brunswick
A bank director accused of losing millions of investors' dollars before vanishing last year was arrested Tuesday during a traffic stop in a city in south Georgia.
7:00PM ( 1 year ago )
Amtrak to suspend some Crescent service in Jan., Feb.
Amtrak service will shut down in parts of the Southeast for several days in January and February for rail maintenance by Norfolk Southern Railway.
9:00AM ( 1 year ago )
Lung cancer scans urged for some smokers, not all
Certain current or former heavy smokers should start getting yearly scans for lung cancer to cut their risk of death from the nation's top cancer killer, government advisers said Monday - even as they stressed that the tests aren't for everyone.
7:26AM ( 1 year ago )
Business News
Sex offender held in Hall County for failing to register
A 47-year-old man was booked into the Hall County Jail Tuesday, being held without bond for allegedly failing to register as a sex offender, his second such arrest.
6:09PM ( 1 year ago )
Pharmacy robberies may involve same suspect
Oakwood Police Tuesday afternoon released details in a pharmacy robbery they're investigating, similar to one that happened in the Hall County Tuesday morning.
5:46PM ( 1 year ago )
Victim critical following apartment fire
A 41-year-old woman was in critical but stable condition Tuesday after being rescued from an apartment fire in Forsyth County late Monday afternoon.
3:16PM ( 1 year ago )
Local/State News
Feeling US snub, Saudis strengthen ties elsewhere
Increasingly vocal in its frustration over U.S. policies in the Mideast, Saudi Arabia is strengthening ties elsewhere, seeking out an alignment that will bolster its position after it was pushed to the sidelines this year.
4:34PM ( 1 year ago )
NSA reportedly intercepts computer deliveries
A German magazine has lifted the lid on the operations of the National Security Agency's hacker unit, revealing how American spies intercepted computer deliveries, exploited hardware vulnerabilities, and even hijacked Microsoft's bug report system to spy on their targets.
12:31PM ( 1 year ago )
Rockets fired from Lebanon into Israel
Rockets from Lebanon struck northern Israel on Sunday, causing no injuries but sparking an Israeli reprisal shelling in a rare flare-up between the two countries.
12:26PM ( 1 year ago )
Politics
In Alaska wilderness, Obama stares down melting glacier to sound alarm on climate change
SEWARD, Alaska (AP) — President Barack Obama stared down a melting glacier in Alaska on Tuesday in a dramatic use of his presidential pulpit to sound the alarm on climate change.From a distance, Exit...
1:24AM ( 3 hours ago )
China leads Asian stock markets lower after poor factory data reinforce investor nervousness
HONG KONG (AP) — Asian stocks extended a global market sell-off Wednesday as poor manufacturing data from the world's two biggest economies dampened investor sentiment.KEEPING SCORE: The Shanghai Comp...
11:03PM ( 5 hours ago )
Thousands without power after monsoon storm hits Phoenix area, damages buildings, cars
PHOENIX (AP) — Thousands of Phoenix-area residents and businesses, including a food bank, remained without power a day after a monsoon storm knocked down trees, damaged buildings and toppled a tractor...
10:50PM ( 5 hours ago )
The Latest: GOP nominee for governor supports clerk's refusal to issue gay marriage license
MOREHEAD, Ky. (AP) — The latest on a Kentucky county clerk who has refused to issue marriage licenses despite a U.S. Supreme Court ruling against her (all times local):6 p.m.Kentucky's Republican nomi...
6:05PM ( 10 hours ago )
Clinton, aides stressed need to protect sensitive State Department information in email
WASHINGTON (AP) — Hillary Rodham Clinton and her aides at the State Department were acutely aware of — and occasionally frustrated by — the need to protect sensitive information when discussing intern...
2:56PM ( 13 hours ago )