Household income falls for 2nd straight quarter
Statistics Korea data showed yesterday that household income fell for the second straight quarter in the third quarter from a year earlier. However, household spending saw an increase mostly due to government stimulus packages.
The statistics agency said the average monthly income of households with at least two family members stood at 3.45 million won ($2,973.40) during the July-September period. That was 1.4 percent less compared with the third quarter of 2008. In the second quarter, household income contracted by 0.1 percent from a year earlier.
The agency partly attributed the decrease in the third quarter to the fact that Chuseok came in October, in the fourth quarter, this year. On the lunar calendar, Chuseok falls on Aug. 15. The date varies widely on the solar calendar. During this national holiday many companies give bonuses to employees. Last year it fell in September. Household income from bonuses fell 9.5 percent in the third quarter from a year earlier, the Statistics Korea data showed. Household spending rose 1.4 percent to 2.82 million won, the agency said, although the inflation-adjusted increase was only 0.1 percent.
The agency said people increased spending on health care, transportation and televisions. Because of state tax breaks on the purchase of cars and growing concern over a new flu epidemic, spending on transportation and health rose 11.1 percent and 12.4 percent, respectively. The purchase of cars rose 78.9 percent in the third quarter from a year earlier.
The spending on entertainment and cultural activities rose 16.3 percent as people increased the purchase of large-sized televisions. The government plans to impose an individual consumption tax on large home electronic appliances beginning next year.
Spending on video and audio devices rose 40.3 percent in the third quarter from a year earlier. The government said the sluggish employment condition and slowing wages also played a part in the decrease of income. However, it said things would have been worse without the state job creation project and tax credits for labor.
By Moon Gwang-lip [email@example.com]