US Household Incomes Rise for 3rd Year Running
The median US household income rose for a 3rd year running in Y 2017 and the poverty rate declined further, government data showed on Wednesday.
The Census Bureau says incomes for a typical household, adjusted for inflation, rose 1.8%, from $60,309 in Y 2016 to $61,372.
The Census Bureau said in its Income, Poverty and Health Insurance Coverage and Supplemental Poverty Measure report that about 28.5-M residents did not have health insurance in Y 2017, not statistically different from the previous year.
The report also showed the poverty rate fell to 12.3% last year from 12.7% in Y 2016.
Yet households are still earning essentially the same income they did in 2007 just before the Great Recession. Their inflation-adjusted median income remains below the record for a typical household the $62,000 reached in Y 1999.
Last year, the number of people with jobs rose 1.7 million. And the number of workers with full-time permanent jobs increased 2.4 million. For years after the recession ended in 2009, the number of part-time workers who would have preferred full-time jobs remained elevated.
Meanwhile, the Gini index, the most common measure of income inequality, was 0.482 in Y 2017, little changed from Y 2016. The higher the number, the more unequal the income distribution.
Americans continue to see their lot improve as the economy builds on the progress made since it emerged from the recession in mid-2009, accompanied by healthy hiring and an unemployment rate near the lowest in almost 5 decades.
At the same time, 10 years after the financial crisis marked by the collapse of Lehman Brothers Holdings Inc., the large number of poor people and persistent inequality are a reminder that there is more work to be done.
The report could still be welcome news for Republicans ahead of the congressional midterm elections in November, and President Donald Trump’s tax cuts implemented in Y 2018 may further boost growth, though his trade policy remains a risk for the economy, creating uncertainty for businesses and for employment.
Even with the better picture on overall incomes, disparities between groups persisted last year.
Median earnings for men rose 3% to $44,408, while women earned $31,610, just 0.2% above Y 2016. Racial gaps widened, with the median income for Black households down 0.2% to $40,258, while non-Hispanic white household income rose 2.6% to $68,145. Hispanic households fared better, with a 3.7% jump to $50,486.
No one seems to know why there is no inflation
US wholesale prices fell unexpectedly last month for the 1st time since February 2017, pulled down by falling prices for transportation and warehousing services.
The drop suggests that inflationary pressures may be easing despite the strength of the US economy.
The Labor Department said Wednesday that its producer price index — which measures inflation before it reaches consumers — fell 0.1% in August after being flat in July. Producer prices were up 2.8% from August 2017.
“Inflation pressures look modest for this late in an economic cycle,” The chief financial economist at MUFG Union Bank, wrote in a research note. The American economy is enjoying the second-longest expansion on record, having emerged from the Great Recession in June 2009.
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