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Income of households headed by 40-somethings grows 0.9% in 2016

South Korean households headed by people in their 40s saw their monthly income rise at the slowest pace ever in 2016, data showed Tuesday, sparking concerns it could further dampen the nation's anemic consumption.

According to the data by Statistics Korea, the average monthly income of those households came to 5,005,000 won ($4,414) last year, up a mere 0.9 percent from a year earlier which compares to the 2.8 percent on-year expansion the previous year.

(Yonhap)
(Yonhap)

It also marked the lowest annualized increase since 2003, when the state statistical agency started compiling related data.

On an annualized basis, the income of households with 40-something heads had been increasing at more than 2 percent before decreasing in the third quarter of last year for the first time.

During the July-September period, their income sank 0.03 percent from a year earlier, with the pace of contraction widening to 0.04 percent in the fourth quarter.

The agency attributed last year's slow growth mainly to a decline in income from their own enterprises. The business income of households with 40-something breadwinners dipped 1.7 percent in 2016 from the previous year, swinging to a contraction for the first time in three years.

Making matters worse, their earned income climbed in the 2 percent range, the lowest to date, for three years in a row, it added.

"With the country remaining dogged by the sluggishness of its economy, more people have started one-man operations, making the self-employed sector more competitive and affecting their income," a government official said.

The slump in income of those households is widely feared to throw cold water on concerted government efforts to kick-start flaccid private consumption as they lead domestic demand with brisk spending power.

Last year, the monthly average spending of such households came to 3.08 million won, the largest amount among households headed by people in other age brackets.

Hit by slumping income, consumption expenditures of households headed by 40-somethings sank 2.7 percent from a year earlier, marking the first on-year drop in three years and the biggest pace of decline since the first quarter of 2009, according to the data. (Yonhap)

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