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January 3, 2018

Median household income in the U.S. rose to an estimated $58,741 in November 2017, an increase of 0.2% from our previous October 2017 estimate of $58,643. The following chart shows our estimates for the trends for both nominal (red) and inflation-adjusted median household income (blue) from January 2000 through November 2017.

Median Household Income in the 21st Century: Nominal and Real Estimates, January 2000 to November 2017

In nominal terms, which provide perhaps the best indication of the state of the U.S. economy for typical American households, median household income continues to rise steadily, much as it has throughout 2017 after having stalled in the latter half of 2016. Though our estimates from June 2017 through November 2017 are still preliminary, pending ongoing revisions, the data suggests that there has been a small uptick in the rate of growth of median household income in the U.S. during the period from September through November 2017.

After adjusting the monthly nominal household income estimates for inflation, so that they are expressed in terms of constant November 2017 U.S. dollars, we also find an uptick in so-called "real" median household income in recent months, which has come after this measure dipped sharply from July to September 2017. This period coincides with the impact of Hurricane Harvey and Hurricane Irma, which caused a short term spike in the prices of consumer goods and construction materials in Texas, Florida and in other states along the gulf coast, which has since largely dissipated.

The methodology for the approach we've developed to generate these median household income estimates is described here. In generating inflation-adjusted portion of the Median Household Income in the 21st Century chart above, we've used the Consumer Price Index for All Urban Consumers (CPI-U) to adjust the nominal median household income estimates for inflation, so that they are expressed in terms of the U.S. dollars for the month for which we're reporting the newest income data.

Analyst's Notes

Next month, when we have the preliminary data for December 2017, we will make a spreadsheet version of our analysis available, which we are planning to periodically update on at least a semi-annual basis.

Data Sources

U.S. Bureau of Economic Analysis. Table 2.6. Personal Income and Its Disposition, Monthly, Personal Income and Outlays, Not Seasonally Adjusted, Monthly, Middle of Month. Population. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 22 December 2017. Accessed: 30 December 2017.

U.S. Bureau of Economic Analysis. Table 2.6. Personal Income and Its Disposition, Monthly, Personal Income and Outlays, Not Seasonally Adjusted, Monthly, Middle of Month. Compensation of Employees, Received: Wage and Salary Disbursements. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 22 December 2017. Accessed: 30 December 2017.

U.S. Department of Labor Bureau of Labor Statistics. Consumer Price Index, All Urban Consumers - (CPI-U), U.S. City Average, All Items, 1982-84=100. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 13 December 2017. Accessed: 30 December 2017.

References

Sentier Research. Household Income Trends: January 2000 through May 2017. [Excel Spreadsheet with Nominal Median Household Incomes for January 2000 through January 2013 courtesy of Doug Short]. [PDF Document]. Accessed 22 June 2017. [Note: We've converted all data to be in terms of current (nominal) U.S. dollars to develop the analysis presented in this series.]

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