U.S. incomes rose sharply and poverty declined in 2015, according to new government figures released Tuesday.
Median household income rose 5.2 percent to $53,657, the Census Bureau reported. That was the first inflation-adjusted increase in median incomes since 2007, and the largest one-year jump in income on record.
The U.S. as a whole has still not recovered from the financial crisis, the data show, with median incomes still 1.6 percentage points below the 2007 mark and 2.4 percent below the all-time high in 1999.
Nevertheless, some groups are doing better than ever. Real median household incomes for Asian and non-Hispanic white Americans are at an all-time peak, exceeding not just the highs reached before the financial crisis, but also those of the Internet bubble years. Hispanic families have recovered the income losses from the 2008 crisis, but have median incomes slightly below the all-time high set in 2000. Only black families have incomes still significantly below the high-water mark.
The poverty rate, meanwhile, tumbled 1.2 percentage points to 13.5 percent, the biggest such drop since 1968. With the decline 43.1 million people were in poverty, 3.5 million fewer than the year before. To be considered impoverished, a family of four had to have earnings under $24,036.
The gains appeared to accrue to all kinds of people. Incomes rose at all income levels, with the fastest gains — a nearly 8 percent year-over-year increase in income — going to the bottom decile. Poverty fell for all income and racial or ethnic groups.
The Obama White House trumpeted Tuesday’s report. Council of Economic Advisers chairman Jason Furman, writing on twitter, called it “unambiguously the best…report ever.”
The data released Tuesday are taken from the Annual Social and Economic Supplement to the Current Population Survey, the Bureau’s source of national estimates of income and poverty trends. The survey includes more than 75,000 households.
The official poverty rate, set in the 1960s, reflects the amount of income it would take to meet what were then considered the basic necessities for a family. Many researchers, however, see a flaw in the official rate, namely that it only counts cash income and excludes some of the in-kind government benefits that have grown in recent years, such as food stamps, as well as some major tax credits.
In recent years, the Bureau has tried to correct for those shortcoming by also presenting a “supplemental” poverty rate that does include those benefits. Rather than represent an absolute level of necessary income, however, the supplemental poverty rate is simply set at the 33rd percentile of consumption for families. That poverty rate also showed significant improvement, falling by a percentage point to 14.3 percent.
The Obama administration and its allies are positioned to claim the good news in Tuesday’s report as the result of the policies President Obama has pursued during his two terms in office. Income growth has likely picked up even more in 2016, Obama economists noted in a blog post on the report.
“The welcome progress of 2015 reflects both reasonably ‘tight’ labor markets and improved government policies,” wrote Robert Greenstein, a budget expert and president of the Center on Budget and Policy Priorities, a left-of-center Washington think tank. At an average of 5.3 percent in 2015, unemployment was not far from the rate that economists at the Federal Reserve think would represent full employment. More recently, the unemployment rate has declined to 4.9 percent.
Even so, Republicans on Tuesday morning previewed a response to the statistics that still implicates Obama’s management.
“Today’s report is another disappointing confirmation that too many Americans are still struggling to provide for their families and reach their full potential,” Kevin Brady, the Texan who chairs the House Ways and Means Committee, said in a statement. “The federal government invests billions of dollars each year in programs to help low-income Americans—but more than 43 million people continue to live in poverty. It shouldn’t be this way in America.”
