Poverty rate and number of uninsured rose while household income fell. The Census Bureau reported that the poverty rate and the number of Americans without health insurance rate rose in 2008 to 13.2 percent and 46.3 million, respectively, while real median household income fell to $50,303 (inflation-adjusted 2008 dollars). Between 2000 and 2008, the number of uninsured Americans swelled by 7.9 million. This represents a 20.6 percent increase over the eight years of the Bush Administration. In addition, the number of Americans living in poverty increased by 8.2 million from 2000 to 2008. The increase in the number of Americans living in poverty rose to 39.8 million pushing the poverty rate up by nearly 2 percentage points since 2000. Over the same period, real median household income fell $2,197. This decline in real median household income of 4.2 percent during the Bush Administration contrasts with the 14 percent rise during the Clinton Administration.  For more information click here.

Trade deficit grows due to increase in imported goods.  The Census Bureau and the Bureau of Economic Analysis reported that the trade deficit for goods and services widened by $4.5 billion to $32.0 billion in the month of July.  The accumulated trade deficit year-to-date comes to $207 billion, approximately half the totals for the same periods in 2007 and in 2008.  Exports increased by $2.7 billion, but imports increased $7.2 billion, broadening the trade gap by the largest amount on a month-to-month basis since July 2008.  The gap between imports and exports was widest in July 2008 but the trade balance steadily declined through the rest of 2008 and the start of 2009 due to the decline in imports. This increase in the trade deficit reflects an increase in net imports of crude oil ($16.6 billion, jumping $1.2 billion from June to July) and automotive vehicles, parts, and engines ($6.7 billion, a month-to month increase of $1.0 billion).  (See Chart) The increase in automotive imports is likely due to the Car Allowance Rebate System (CARS or “Cash for Clunkers”) that expired in August.  A recent study by the Council of Economic Advisers (CEA) reported that the CARS program boosted vehicle sales by 490,000 cars in July and August.  Additionally, the CEA report estimates that the program will raise GDP in the third quarter of 2009 between 0.1 and 0.4 percentage points.

Retail sales increase 2.7 percent in August.  Retail sales increased in August due to a 10.6 percent month to month increase from motor vehicle and parts dealers benefiting from the CARS program.  Excluding the motor vehicle and parts dealers and gasoline stations, retail sales grew by 0.6 percent.

Consumer credit outstanding falls for sixth straight month.  Total consumer credit decreased by 10.5 percent at an annual rate in July, the largest monthly decline since June of 1975.  Total consumer credit outstanding has been declining for the last six months, reflecting both tighter credit markets as well as consumers’ reluctance to purchase.  The recently released Federal Reserve’s Beige Book, which reflects regional economic activity in July and August, shows that loan demand was weak and that credit standards remain tight in many reporting Districts.