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If American consumers still seem tapped out years after the recession's official end, new census figures help explain why.

Incomes are shrinking among middle earners in the world's largest economy. Real median household income fell 1.5 per cent last year from a year earlier to $50,054, the second straight annual drop.

It's not just a statistical blip. As of last year, Americans' real median household income was a full 8.1 per cent lower than in 2007, the year before the recent recession, the census numbers show.

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The gap between the rich and the poor is growing too. Income inequality grew 1.6 per cent between last year and a year earlier – the first time its Gini index measure has shown an annual increase since 1993.

Poverty rates remained near record highs. Some 46.2 million people were living in poverty last year, little changed after three years of increases and at the highest level in more than half a century. That equates to 15 per cent of the population, or one in six Americans.

Politicians will no doubt seize on the latest numbers – in Mitt Romney's case, to show how weak the U.S. economy still is, and in Barack Obama's to show the American middle class needs targeted support.

The findings have clear implications for Canada, which relies on U.S. demand for the bulk of its exports. Today's figures show any real revival could be a long time coming.

Here are some other key census figures:

* Real median earnings of both men and women who worked full time, year-round fell 2.5 per cent between 2010 and 2011.

* The poverty rate last year for children under the age of 18 was 21.9 per cent.

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* The weighted average poverty threshold for a family of four last year was $23,021.

* The portion of people without health insurance coverage fell to 15.7 per cent last year from 16.3 per cent. That amounts to 48.6 million without coverage in 2011.

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About the Author

Tavia Grant has worked at The Globe and Mail since early 2005, covering topics from employment and currency markets to trade, microfinance and Latin American economies. She previously worked for Bloomberg News in Toronto and Zurich, writing on mining, stocks, currencies and secret Swiss bank accounts. More


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