In 2024, the average American household "consumer unit" spent $78,535 on everything. That includes things like housing, transportation, food, personal insurance and pensions, healthcare, entertainment, apparel and services, education, cash contributions, alcoholic beverages, personal care products and services, reading materials, tobacco products and smoking supplies, and whatever miscellaneous consumer products there are that don't fit into any of these categories.

That's according to the Bureau of Labor Statistics' Consumer Expenditures report for 2024, whose publication was twice delayed until 19 December 2025. The report is compiled as part of the Consumer Expenditure Surveys program, which provides insight into what the average American "consumer unit", to use the BLS' term of endearment that roughly corresponds to households, got for all the money they spent in 2024.

That's useful information, which is why the results of the Consumer Expenditures surveys are used to determine the weighting of various consumer spending categories within the Consumer Price Index (CPI), the most commonly cited measure of inflation for the U.S. economy.

Because the data is used this way, it's important to track how the composition of consumer spending changes over time. For example, because the Affordable Care Act of 2010 (ACA) made health insurance much more costly, changes in the cost of health insurance has a bigger effect on consumer price inflation today than they did before the ACA was passed. Meanwhile, the amount that Americans spend on apparel has declined over time, so changes in apparel prices today have a smaller effect on the consumer price index than what they had back in the early 1980s when the survey began.

The Big Picture

Our first chart presents the average annual amount of consumer expenditures by American "consumer unit" households in each of the 41 years from 1984 through 2024.

These figures represent the nominal, or non-inflation adjusted, total average consumer spending in each year. As you can see, recent years have seen the amount the average American household consumer units spend rise sharply because of the high inflation unleashed during this period. Average household consumer unit expenditures grew from $61,334 in 2020 to $78,535 in 2024.

Growth of Consumer Expenditures by Major Categories

The next chart breaks out that spending into major expenditure categories, such as housing, transportation, food, life insurance & pension savings & Social Security, health insurance & medical expenses, entertainment, charitable contributions, apparel & other products, and education, to put them in order from highest to lowest:

This chart verifies spending is up substantially in nearly every major consumer expenditure category, with housing, transportation, and food seeing the most rapid increases from 2021 through 2024.

Changing Shares of Major Categories of Consumer Expenditures Over Time

The third chart reveals the trends for these categories, showing how their individual share of total average annual consumer expenditures has been changing since 1984.

Our final chart assembles all these categories together to reveal how the overall composition of household consumer unit expenditures has changed from 1984 through 2024. The major categories of consumer spending that have had a falling share of total consumer spending over time are shown in shades of green, those claiming a rising share over time are shown in shades of purple.

References

U.S. Bureau of Labor Statistics. Consumer Expenditure Survey. Multiyear Tables. [PDF Documents: 1984-1991, 1992-1999, 2000-2005, 2006-2012, 2013-2020. Excel spreadsheet: 2021-2024]. Reference URL: https://www.bls.gov/cex/home.htm. 19 December 2025. 

Motio Research's initial estimate of U.S. median household income for November 2025 is $87,160. This estimate represents a $920 (or a little over one percent) increase over its initial $86,240 estimate for September 2025.

Because the Current Population Survey data the firm uses to generate its median household income estimates wasn't collected by the U.S. Census Bureau during the Senate Democrats' government shutdown fiasco, the firm doesn't have a solid estimate for October 2025's median household income backed by its established methodology.

The firm develops its estimates using income data collected by the U.S. Census Bureau through its monthly Current Population Survey, which is conducted during the week containing the 12th day of the month following the month in which its data applies. For the October 2025, the government shutdown blocked the Census Bureau from conducting the monthly survey because no funding had been authorized to perform it.

Motio Research however was able to impute an estimate for October 2025 in its Real Median Household Income Index, in which the median household income of January 2010 is assigned a value of 100 and the values for subsequent months are indexed with respect to that base value. The initial value of the firm's U.S. Real Median Household Income Index for October 2025 was imputed to be 119.0 while its index value for November 2025 is 119.2.

The following screenshot of Motio Research's interactive chart shows how this index has changed from January 2010 through November 2025:

The disruption of the 43-day-long federal government shutdown has posed a number of challenges for everyone who uses the government's statistics for their analyses. Many government agencies are still getting caught up, which will likely continue for several months to come.

Analyst's Notes

Political Calculations produces median household income estimates using other original data sources that complement Motio Research's survey-based estimates. The good news is we'll be able to generate solid estimates of median household income for both October and November 2025 using our alternate methodology, but the bad news is that will have to wait until the Bureau of Economic Analysis releases its aggregate wage and salary compensation data for these months on 29 January 2025.

In the meantime, we do have the ability to project what our estimates will be. We anticipate our median household income estimates will be in the ballpark of $85,314 for October 2025 and $85,606 for November 2025.

Regular readers will recall our observations that a significant gap has developed between Motio Research's estimates and ours. We have an interesting hypothesis why that is, which we'll present in a separate analysis sometime in early February 2025 after we also have the aggregate income data for December 2025.

Between now and then, we'll update this article with our estimates for October and November 2025 on or shortly after 29 January 2025.

Image credit: U.S. Census Bureau. We modified the public domain image to make it more generally applicable beyond reporting the median household income from 2022.

2025 was a lackluster year for dividend paying firms in the U.S. stock market.

That outcome can be verified with a single number. The net number of favorable dividend actions announced by dividend paying companies was negative in 2025, with 208 more firms announcing unfavorable changes like decreases or omissions in their dividend payouts than firms announcing favorable changes like increases or those that paid extra dividends to shareholders. Ten of the twelve months of 2025 registered a negative net result by this simple metric.

What made the year a lackluster one rather than an outright bad year is that most of the decrease came in the form of fewer firms announcing dividend increases. 2025 continued a now three-year long trend on that count, avoiding the fate of becoming a bad year with the number of firms announcing unfavorable changes holding relatively stable during the year.

The following chart shows the number of dividend increases and decreases announced by dividend-paying firms in each of the last five quarters from 2024-Q4 through 2025-Q4. It reveals most of the bad news for dividend paying firms occurred in the first quarter of 2025, with a less negative performance in the remaining quarters of the year, which agrees with the general pattern we observed in each month's net favorable dividend actions.

Our next chart focuses on the number of dividend increases and decreases announced each month from January 2004 through December 2025. Here's where you can see that the falling number of dividend increases follows a pattern that has become established since the beginning of 2023 even as the number of dividend decreases remains well below a threshold that indicates recessionary conditions are present in the U.S. economy.

Finally, the following table tallies up all the favorable and unfavorable changes recorded by dividend paying firms in the U.S. stock market for the month of December 2025. It also shows the month-over-month (MoM) and year-over-year (YoY) changes for December 2025's dividend metadata.

The number of dividend decreases in December 2025 was notably higher than in the previous month of November 2025 and in December 2024, but remains well below the recessionary condition threshold. The good news, such as it is, is that the year-over-year number of favorable changes was only down by two, which suggests that three-year-long negative trend may be close to ending.

Here's hoping 2026 will become a net positive year for the U.S. stock market's dividend paying companies!

References

Standard and Poor. S&P Market Attributes Web File. [Excel Spreadsheet]. Accessed 2 January 2026.

Image Credit: Microsoft Copilot Designer. Prompt: "An editorial cartoon of a Wall Street bear looking at a chart labeled '2025 NET FAVORABLE DIVIDEND ACTIONS' and shows the value '-208'".

S&P 500 (Index: SPX) investors enjoyed a relatively quiet, nearly news free two weeks to end 2025. The index set a new record high of 6,932.05 just before the Christmas Day holiday, before retreating 1.2% in the next week on little-to-no significant market-moving news to close out 2025 at 6,845.50. On 2026's first day of trading, the index rose to 6,858.47, just 1.1% below its 24 December 2025 record high close, as investors started the year with little-to-no market moving news that could meaningfully alter their outlooks for the year-to-come.

And, we might add, no indication of any impending geopolitical event with the potential to reshape expectations for a global industry.

Which is to say it is quite possible we'll be starting the first full trading week of 2026 with a bang. Since that will be a story we cover in the next edition of the S&P 500 chaos series, let's close out 2025 properly with the final update to the alternative futures chart for 2025-Q4.

Through Friday, 2 January 2026, we find the S&P 500's is tracking along in the middle of the new redzone forecast range we added to the chart a week earlier, which assumes investors are focusing their forward-looking attention on the current quarter of 2026-Q1.

The thing to pay attention to in the week ahead is how the expectations for oil prices change as a consequence to the weekend's geopolitical event. To help set that stage, here are the market-moving headlines that were setting investor expectations during the past two holiday-shortened trading weeks.

Monday, 22 December 2025

• Signs and portents for the U.S. economy:
• Oil settles higher on risk of disruptions to Venezuela, Russia supply
• Oil price gains after US interception of oil tanker off the coast of Venezuela over weekend
• Fed minion sees continuing their policy targeting 3% inflation as reason to hold rates steady, another minion talks about sticking around after term ends until replaced:
• Fed’s Hammack sees inflation near 3% as case for holding rates, WSJ reports
• Fed's Miran says he will likely stay after term ends until his seat is filled
• Bigger stimulus not developing in China:
• China leaves benchmark lending rates unchanged for seventh straight month
• BOJ minions / Bigger trouble developing in Japan:
• BOJ to raise interest rates to 1.5% under Ueda, ex-central bank policymaker says
• Germany's automotive exports plunged in 2025:
• German auto exports hit hard by Trump tariffs, study shows
• German exports in machinery and autos/parts to China have declined strongly
• The China shock hits Germany
• Why Germany Wants a Divorce With China
• Wall Street finished higher to kick off the holiday shortened trading week
• Wall Street advances with broad gains, tech gains continue

Tuesday, 23 December 2025

• Signs and portents for the U.S. economy:
• Q3 U.S. GDP climbs 4.3%, past consensus, in BEA's delayed initial estimate
• US economic growth accelerates in third quarter
• Robust consumer spending, rising exports fuel US economic growth in third quarter
• Q3 GDP Unexpectedly Surges To 2 Year High On Soaring Health Insurance Spending
• Oil steadies as market weighs geopolitical risks against bearish fundamentals
• Copper price hits record high on concerns over tariffs and shortages
• Fed minions may ditch 2% inflation goal they haven't met in years:
• Bessent signals openness to revisiting Fed's 2% inflation goal
• Bigger AI developing in China:
• Global investors turn to Chinese AI as Wall Street fears bubble
• Bigger trouble developing in Japan, BOJ thinking about hiking rates sooner than expected:
• Japan's fiscal woes may cause more yen falls, yield rises, says ex-BOJ policymaker
• Japan issues sternest intervention warning, says yen deviating from fundamentals
• BOJ's hawkish wink suggests next hike may be sooner than markets think
• S&P 500 notched a record close as Wall Street ended higher after GDP data
• S&P registers record close as growth stocks advance
• Surprise asset of the year? The 30-year US Treasury bond

Wednesday, 24 December 2025

• Signs and portents for the U.S. economy:
• Oil steady on US data, geopolitical tension
• Bigger trouble, stimulus developing in China:
• China's farmers are up to their ears in milk
• Chinese capital Beijing further eases home buying curbs
• China widens foreign investment incentive list to stem falling inflows
• BOJ minions maybe not so sure about rate hike plans:
• BOJ debated need to keep raising rates, October meeting minutes show
• Dow and S&P 500 closed at record highs on Christmas Eve
• S&P 500, Dow hit all-time closing highs; gold, silver touch records
• AI spending, strong corporate profits, Fed rate cuts seen as key to 2026 stock market

Friday, 26 December 2025

• Signs and portents for the U.S. economy:
• Oil falls 2% on looming supply glut, hopes of Ukraine peace deal
• Copper Hits Record in China, Jumps in New York on Supply Concern
• BOJ's chief minion wants higher interest rates, bigger troubles with fiscal policy developing in Japan:
• BOJ chief sees progress in hitting price goal, signals further hikes
• Japan proposes record budget spending while curbing fresh debt
• Wall Street halts five-day advance as precious metals grab the spotlight
• Wall St ends close to all-time highs in light, post-holiday session
• Silver crosses $77 mark while gold, platinum stretch record highs
• How silver is traded, from stocks and shares to coins and bars

Monday, 29 December 2025

• Signs and portents for the U.S. economy:
• US pending home sales surge to highest in nearly 3 years in November, NAR says
• US economy to ride tax cut tailwind but faces risks
• Americans in line for ‘gigantic’ tax refund early next year, says Scott Bessent
• Oil settles up over 2% on dented peace hopes in Ukraine, tensions in Yemen
• Bigger trouble, stimulus developing in China:
• China's industrial profits tumble at fastest pace in over a year
• China's finance ministry says fiscal policies will be more 'proactive' in 2026
• BOJ minions watching yen, markets watching BOJ minions:
• BOJ debated need for more rate hikes even after December move, summary shows
• Yen strengthens after BOJ minutes, markets still eye intervention odds
• Rising Japanese Rates Are Creating New Risks For Global Markets
• U.S. stocks end lower to start the New Year's shortened week
• US stocks end down as tech shares drop ahead of New Year

Tuesday, 30 December 2025

• Signs and portents for the U.S. economy:
• Oil prices steady as Russia-Ukraine peace hopes fade, Yemen tensions rise
• Fed minions thinking more rate cuts, QE-like policies ahead:
• Fed policymakers judged 'ample' levels of reserves warranted bill-buying, minutes show
• Fed officials showed deep divisions at December meeting, minutes show
• Bigger trouble, stimulus developing in China:
• Exclusive: China mandates 50% domestic equipment rule for chipmakers
• Wall Street stretches tech-led sell-off into the last days of the year
• S&P 500, Nasdaq end slightly down in holiday-thin trade, Meta gains on deal
• Wall Street closes slightly lower near the end of a banner year; gold rebounds

Wednesday, 31 December 2025

• Signs and portents for the U.S. economy:
• Oil posts biggest annual decline since 2020; Brent seen near $55 in the near term
• Bigger stimulus developing in China:
• China's Xi promises more proactive macro policies in 2026
• China approves major projects and investment plans for 2026 totalling $42 billion
• China allocates initial $8.9 billion for consumer goods trade-in scheme in 2026
• China's factory activity edges back to growth in December, private PMI shows
• China's factory activity rebounds thanks to festive stockpiling
• China imposes curbs on beef imports to protect domestic industry
• China to impose additional tariffs of 55% on some beef imports from 2026
• BOJ minions look back at their success in hiking Japan's interest rates:
• Benchmark Japan bond yields extend steepest annual surge since 1994
• S&P 500 finishes with 16% gain in 2025
• Wall Street ends year's final session lower but posts big annual gains for 2025

Friday, 2 January 2026

• Signs and portents for the U.S. economy:
• Oil prices settle lower after biggest annual loss since 2020
• US draws bulk of state-owned investment in 2025 as assets hit record $60 trillion
• Bigger trouble, stimulus developing in China:
• China taxes condoms, contraceptive drugs in bid to spur birth rate
• Bigger trouble developing in Japan:
• Japan business lobby chiefs urge government to tackle weak yen, media reports
• Bigger trouble developing in Eurozone:
• European factory activity ends 2025 in deeper contraction
• German exporters face prolonged slump in key U.S., China markets
• Nasdaq falls flat, U.S. stocks battle to recover from tech sell-off to kick off 2026
• Dow closes higher on first day of 2026, still no Santa Claus rally

The CME Group's FedWatch Tool continues to anticipate additional quarter point rate cuts on 18 March (2026-Q1) and 29 July (2026-Q3), with no other rate cuts projected in 2026.

The Atlanta Fed's GDPNow tool's first estimate of real GDP growth in the U.S. during 2025-Q4 is +3.0%. Meanwhile, the BEA's first official estimate of GDP in the preceding quarter of 2025-Q3 came in at 4.3%, much higher than the GDPNow tool's final projection of +3.5% growth for that long since ended quarter.

Image credit: Microsoft Copilot Designer. Prompt: "An editorial cartoon of a Wall Street bull and bear watching the New Year's Eve ball drop to start 2026 and screaming with fear".

How much money will the U.S. government let you keep out of each of your regular paychecks in 2026?

2025 saw big changes to U.S. income taxes, mainly in the form of the One Big Beautiful Bill Act making the income tax cuts that were originally passed in 2017 and set to expire at the end of 2025 permanent. Without those changes, nearly all Americans would have been in for an income tax shock in 2026.

If they hadn't been, the higher income tax rates that prevailed back in 2017 would have come back into full force. If you're like many Americans, chances are you wouldn't have noticed until you got your first paycheck in the new year. That would be when you would direct evidence of how much more ol' Uncle Sam is gouging you. Fortunately, that nasty situation was avoided and the changes to how much the U.S. government is taking out of every one of your paychecks are pretty small by comparison. Compared to 2025, the various withholding levels have been adjusted for inflation and that's about all.

But inflation adjustments may not be the only changes that affect the bottom line of your paycheck. If you changed the contribution percentage to your 401(k) or 403(b) retirement savings plans, both the amount that goes these plans and the amount of your federal withholding taxes will change. Likewise if you use changed your contributions for a tax-deferred flexible spending account for covering your dependent or health care expenses.

Your 2026 paycheck may also see a change to its top line. If you get a raise, for example, that will affect the bottom line of your paycheck. The question is how much.

Our 2026 paycheck tool can help you find out what your paycheck will look like before you even see your first paycheck of the year! If you're reading this article on a site that republishes our RSS news feed, please click through to our site to access a working version of the tool. Otherwise, you're more than welcome to enter whatever numbers you want to consider for what your paychecks might look like in 2026.

But if you really want to see something, after you run the numbers for 2026, please check out our paycheck tool using 2017's income tax rates with your 2026 income to get an indication of how different your paycheck could have been without the One Big Beautiful Bill Act of 2025.

The tool's results convey how much money the IRS withholds for federal taxes from each of your paychecks in 2026. There are however a number of factors that will complicate your withholding tax results based upon how much you cumulatively earn during the year.

For example, once your cumulative income reaches $184,500 or higher, you will no longer have Social Security's payroll tax of your income deducted from your paycheck, which is 6.2% if you're an employee, but which doubles to 12.4% if you're self-employed (the self-employed pay both the employee and employer payroll taxes). Our tool is designed to provide withholding tax estimates for the majority of Americans who are employed by others. People making this amount of money don't really get a break however because they've already been pushed into a higher tax bracket - they are paying higher regular income tax rates than those paid by over half of all income-earning American households.

There's also the complication provided by the so-called "Additional Medicare Tax" that your employer is required to begin withholding from your paycheck if, and as soon as, your year-to-date income rises above the $200,000 mark. This surtax of 0.9% of gross income was imposed by the "Affordable Care Act" (a.k.a. "Obamacare") in 2010, which is still in effect. Since the money collected through this surtax does not directly support the Medicare program, unlike the real Medicare payroll taxes paid by you and your employer, it is really best thought of as an additional income tax. That additional income tax is not adjusted for inflation, which means that those who must pay it are subject to 1970s-style income tax bracket creep, even though the tax was sold on the claim that it would be limited to only very high income earners.

In the tool above, when the amount of your annual 401(k) or 403(b) retirement savings contributions exceed the annual limits set by law, we've limited the results our tool provides to be those consistent with their statutory limits, and will do so as if you specifically set the percentage contributions for these contributions with that in mind. Our tool does not consider whether you might take advantage of the "catch-up" provisions in the law that are available to individuals Age 50 or older. For example, individuals Age 50 to 59 can increase their annual contributions by $8,000 in 2026 (up from $7,500 in 2025). Meanwhile, individuals Age 60 to 63 can contribute up to an extra $11,250 beyond the standard maximum contribution to their tax-deferred retirement savings account.

Elsewhere on the Web

There are other salary and hourly paycheck calculators like this on the Internet, including the very well done tools available at PaycheckCity.com. PaycheckCity's State Salary Paycheck Calculators allow you to determine the amount of state income tax withholding that will be taken out of your paycheck in addition to what the federal government will take out. Payroll processing giant ADP also has a salary paycheck calculator that will give you good results. We still find the format of PaycheckCity's calculators to be more user friendly, but ADP's version has the benefit of having an all-in-one user interface.

If however you live in one of the states that have no taxes on earned income (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, or Wyoming), our tool above will provide you with a very good estimate of your actual take-home pay after Uncle Sam has gotten his dirty ape paws all over it.

Previously on Political Calculations

We've been in the business of calculating people's paychecks (not including state income tax withholding) since 2005!

• Your 2005 Paycheck
• Your 2006 Paycheck
• Your 2007 Paycheck
• Your 2008 Paycheck
• Your 2009 Paycheck
• Your Paycheck in 2010
• Your Paycheck in 2011
• Your Paycheck in 2012
• Your Paycheck in 2013: Part 1 - the "same as 2012" version.
• Your Paycheck in 2013: Part 2 - the "over the fiscal cliff" version.
• Your Paycheck in 2013: Part 3 - the "post-fiscal cliff deal" version.
• Your Paycheck in 2014
• Your Paycheck in 2015
• Your Paycheck in 2016
• Your Paycheck in 2017
• Your Paycheck in 2018, Before the Tax Cuts Kick In
• Your Paycheck in 2018, After the Tax Cuts Kick In
• The Bottom Line for Your 2018 Paycheck After the Tax Cuts
• Your Paycheck in 2019
• Your Paycheck in 2020
• Your Paycheck in 2021
• Your Paycheck in 2022
• Your Paycheck in 2023
• Your Paycheck in 2024
• Your Paycheck in 2025
• Your Paycheck in 2026

Image Credit: Microsoft Copilot Designer. Prompt: "An editorial cartoon of a boss and Uncle Sam sitting at a table marked as 'PAYROLL'. The boss is setting out stacks of cash to pay employees and Uncle Sam is taking part of that money."