US incomes fall for first time since 1991

New poverty statistics painted a grim picture of America's economic outlook yesterday, with the Census Bureau reporting the first increase in eight years in the number living at or below the poverty line.

Median incomes across the country fell by more than 2 per cent, the first decline since the end of the previous recession in 1991.

The figures suggested that the economic woes besetting the Bush administration might be worse than some economists had predicted, and that fears of a "double-dip" recession – a return to zero or negative growth from the current, modest signs of recovery – might now become a reality.

Politically, the statistics were a gift to the Democratic Party in its fight to regain control of Congress in November's mid-term elections. Democrat leaders wasted no time in blaming the bad news on the administration's poor economic management and reluctance to spend on social programmes.

The figures also reinforced the perception, rammed home by this year's string of corporate scandals and shareholder rip-offs, that the top echelon of US society is doing just fine thanks to Mr Bush while everyone else suffers disproportionately. Average income for the top 5 per cent rose last year, to $260,464 (£167,000), while it stayed the same or declined for most other people.

Overall, the number of poor Americans rose last year to 32.9 million, an increase of 1.3 million, while the proportion living in poverty rose to 11.7 per cent, from 11.3 per cent in 2000. Median household income fell to $42,228 (£27,000) in 2001, a 2.2 per cent decline.