Unexpectedly Intriguing!
March 1, 2018

Median household income in the U.S. rose to an estimated $59,055 in January 2018, an increase of nearly 0.4% from our December 2017 estimate of $58,829. The following chart shows our estimates for the trends for both nominal (red) and inflation-adjusted median household income (blue) from January 2000 through January 2018.

Median Household Income in the 21st Century: Nominal and Real Estimates, January 2000 to January 2018

In nominal terms, which provide perhaps the best indication of the relative health of the U.S. economy as seen by typical American households, we find that the pace of growth of median household income is continuing the upturn that began in September 2017, following what had been a decelerating trend that had begun back in mid-2014.

After adjusting the monthly nominal household income estimates for inflation, so that they are expressed in terms of constant January 2018 U.S. dollars, we also find "real" median household income in recent months has also continued its upward trend.

These recent trends are easier to see in the following chart, where we have presented the year over year growth rate of median household income in the U.S. in the period from January 2001 through January 2018.

Median Household Income in the 21st Century: Nominal and Real Year Over Year Growth Rates, January 2001 to January 2018

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

Unlike last month, we didn't see any extensive revisions of the population data we use to generate our estimates of median household income. The personal income data however did have pretty minor revisions, which only affected the previous six months of data from July 2017 through December 2017 and didn't meaningfully affect the median household income estimates.

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. [PDF Document, Online Database (via Federal Reserve Economic Data)]. Last Updated: 1 March 2018. Accessed: 1 March 2018, 8:30 AM EST.

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. [PDF Document, Online Database (via Federal Reserve Economic Data)]. Last Updated: 1 March 2018. Accessed: 1 March 2018, 8:30 AM EST.

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: 14 February 2018. Accessed: 1 March 2018.

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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