Median household income ticked down slightly in 2021 from the year before, according to the Census Bureau’s annual report.
The median income in 2021 was $70,800, down from $71,200 in 2020 — the first year of the pandemic and one which featured a brief period of recession. The median income in 2021 represents a 2.8% decrease from where it was in 2019, before the pandemic took hold.
The Census Bureau also released new figures on poverty in the United States from last year. The overall poverty rate plunged to 7.8% in 2021 from 9.2% in 2020, according to the Supplemental Poverty Measure.
Childhood poverty also declined in 2020. Last year, the share of children living in poverty was 5.2%, a weighty decrease from 9.7%. Much of that decline is likely attributable to the expanded child tax credit passed by Congress in President Joe Biden’s American Rescue Plan legislation in March 2021. The expansion expired for this year.
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Biden and Democrats will likely tout the poverty figures as proof that the administration’s legislative agenda has been successful for U.S. families but are unlikely to highlight the slight decline in median household income.
The numbers come the same day as the markets are being walloped by the release of data showing hotter-than-expected inflation — something that will likely overshadow much of the pros of the Tuesday census Report.
Inflation fell slightly to 8.3% for the 12 months ending in August, according to the consumer price index, more than most economists had anticipated. July’s headline CPI reading clocked in at 8.5%.
The Federal Reserve will meet later in September to decide on how big its next rate hike should be. After Tuesday’s CPI report, most investors are betting that the increase will clock in at a whopping 75 basis points.
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There are fears that the Fed’s aggressive rate-hiking will result in the U.S. tumbling into a recession.
GDP fell at a 0.6% annualized rate in the second quarter, according to a revised estimate by the Bureau of Economic Analysis. The numbers come after negative 1.6% GDP growth in the first quarter. Many economists have traditionally regarded two quarters of negative GDP growth as recessionary.
