Tuesday, September 19, 2023

U.S. Incomes Fall for Third Straight Year; American Income Falls as Inflation Increases, U.S. Census Bureau Says, and related stories

Photo: Al Drago/Bloomberg News
WSJ: U.S. Incomes Fall for Third Straight Year
Rapid price increases hit household finances in 2022, cutting inflation-adjusted median income to $74,580
Surging inflation gobbled up household income gains last year, making 2022 the third straight year in which Americans saw their living standards eroded by rising prices and pandemic disruptions.
Americans’ inflation-adjusted median household income fell to $74,580 in 2022, declining 2.3% from the 2021 estimate of $76,330, the Census Bureau said Tuesday. The amount has dropped 4.7% since its peak in 2019.
The figures add to the picture of the economic challenges facing households since Covid-19 hit in early 2020. Inflation hit a four decade high last summer as the pandemic upended supply chains and the Ukraine war drove up energy prices.
This year could be different. Earnings and inflation trends have improved as a strong labor market and cooling price increases boosted household purchasing power, said Bill Adams, chief economist at Comerica Bank.
“Shifting into the present and into the future, the prospects are better for wages to make up for some of the ground lost during the last couple of years,” Adams said.
Wage growth for the typical worker outstripped inflation starting in December 2022, with inflation-adjusted wages rising about 3% in July, according to data from the Atlanta Fed Wage Tracker and the Labor Department.
Household incomes have also risen as more sidelined workers found jobs. Earnings growth has buoyed consumer spending, spurring solid economic growth this year despite the Federal Reserve’s rapidly increasing interest rates.
Inflation has also slowed steadily this year as the Fed hiked interest rates to a 22-year high to bring down inflation by slowing the economy. Annual inflation was 3.2% in July, down from 9.1% in June 2022.
The Census Bureau, in its annual report card on the financial well-being of U.S. households, said median household incomes in 2022 dropped by 3% to 5% in the West, Northeast and Midwest, while the South was unchanged.
White households saw median income decline by 3.6% in 2022 from the prior year to $81,100, while incomes in Black, Asian and Hispanic households were essentially unchanged. Asian households had the highest median income, at $108,700, compared with $62,800 for Hispanic households and $52,900 for Black households. --->READ MORE HERE
Nam Y. Huh/AP Image
American income falls as inflation increases, U.S. Census bureau says:
Americans are bringing home less money as inflation squeezes family budgets, according to a new report from the U.S. Census Bureau.
The U.S. Census Bureau announced Tuesday that real median household income fell in 2022 compared with 2021. Real median household income fell by 2.3% from $76,330 in 2021 to $74,580 in 2022.
At the same time, the cost of goods and services is increasing. Between 2021 and 2022, inflation rose 7.8%. That is the largest annual increase in the cost-of-living adjustment since 1981, according to the U.S. Census Bureau.
The official poverty rate of 11.5% was not statistically different between 2021 and 2022, but the Supplemental Poverty Measure rate in 2022 was 12.4%, an increase of 4.6 percentage points from 2021. It is the first increase in the overall Supplemental Poverty Measure rate since 2010. The Supplemental Poverty Measure is a measure of economic deprivation that addresses some of the limitations of the official poverty measure, according to the Congressional Research Service.
"This increase can be attributed to key changes in federal tax policy, including the expiration of temporary expansions to the Child Tax Credit and the Earned Income Tax Credit as well as the end of pandemic-era stimulus payments," according to the U.S. Census Bureau. --->READ MORE HERE
Follow links below to related stories:

US inflation climbs more than expected in August as gas prices surge

Income falls and official poverty rate rises in US

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