Household income finally tops ’99 peak
Typical American family rebounding from the recession.
WASHINGTON — In a stark reminder of the damage done by the Great Recession and of the modest recovery that followed, the median American household is finally earning more than it did in 1999, the U.S. Census Bureau said in a reported released Tuesday.
Incomes for a typical U.S. household, adjusted for inflation, rose 3.2 percent from 2015 to 2016 to $59,039, the Census Bureau said. The median is the point at which half the households fall below and half are above.
Last year’s figure is slightly above the previous inflation-adjusted peak of $58,665, reached in 1999. It is also the first time since the recession ended in 2009 the typical household earned more than it did in 2007, when the recession began.
Trudi Renwick, the bureau’s assistant division chief, cautioned that the census in 2013 changed how it asks households about income, making historical comparisons imprecise.
Still, the Census data is closely watched because of its comprehensive nature. It is based on interviews with 70,000 households and includes detailed data on incomes and poverty across a range of demographic groups.
Elise Gould, a senior economist at the Economic Policy Institute, said that adjusting for the change in methodology, median income still remains below its 1999 peak. Yet she added that the census report shows American households have made significant economic progress.
“We are definitely pulling ourselves out of the deep hole of the Great Recession,” Gould said.
Median household income rose $4,641, or 8.5 percent, from 2014 through 2016. That’s the best two-year gain on records dating to 1967, according to analysts at the Center on Budget and Policy Priorities.
Yet that improvement comes after a steep recession and a slow recovery that left most American households with barely any income increase. The lack of meaningful raises has left many people feeling left behind economically, a sentiment that factored into the 2016 elections.
The report also showed that income inequality worsened last year. Average incomes among the wealthiest 5 percent of U.S. residents climbed 5.5 percent to $375,088. Average incomes for the poorest one-fifth of households, meanwhile, rose 2.5 percent to $12,943.
The poverty rate fell to 12.7 percent from 13.5 percent, Census said, and the number of people living below the poverty line declined 2.5 million to 40.6 million.