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Consumer Income

In: Business and Management

Submitted By bmmiles
Words 352
Pages 2
Consumer income is a very important factor when dealing with economics. The aspect of consumer income affects the spectrums of the expectations, the debt, the interest rates and the other pieces of the economic puzzle. Consumer income can simply be defined as disposable income or household income of the average consumer. This term is also closely related to the country’s gross domestic product or (GDP). This amount is the amount after taxes and living expenses have been deducted. This remainder is the income used to purchase goods and services such as groceries and other household needs along the way.
The US Household Income was analyzed late in 2012. (Information for 2013 will be released later this year.) As of then, the average US household income was $51,371 dollars. To put that into perspective, the median income decreased by .36% since 2011. Also, this number has decreased by -4.44% in the past 3 years before. We can see that the income is decreasing slightly each year as we go along. With this decrease comes a major shift in the economy. This decrease can be the direct cause of unemployment and then can be a cause in higher interest rates as well as an effect on inflation and aggregate supply and demand.
Supply and demand creates economy for the United States. The numbers discussed above with negatively affect supply and demand currently and in the future. Supply and demand is defined as the amount of a commodity, product, or service available and the desire of buyers for it, considered as factors regulating its price. If the median income is in decline, the supply and demand of a product will decline as well due to the higher price because of the lowered demand for it. This lowered demand comes from the lower income available for consuming and purchasing such products and services. Through these findings, we can understand the importance behind…...

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