Unexpectedly Intriguing!
August 1, 2018

According to Sentier Research, the median household income in the United States rose from $61,858 in May 2018 to $62,175 in June 2018, an increase of 0.5% over the previous month.

The following chart shows the nominal (red) and inflation-adjusted (blue) trends for median household income in the United States from January 2000 through June 2018, as given by Sentier Research's monthly estimates. The inflation-adjusted figures are presented in terms of constant June 2018 U.S. dollars.

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

That fast pace of growth is reflected in the year over year nominal growth rate for median household income, which we've visualized in the following chart.

Median Household Income in the 21st Century: Year Over Year Growth Rate, January 2001 to June 2018

The nominal rate of year over year growth for median household income has now equaled or exceeded 2.7% over the last 15 months. That duration exceeds the two longest durations of 2.7% or higher growth recorded since the Great Recession began after December 2007, which at thirteen months each, were recorded from February 2014 through February 2015, and later from August 2015 through August 2016.

Analyst's Notes

It's a big month for our alternative method for estimating median household income in the United States because the U.S. Bureau of Economic Analysis' data on personal income has just gone through an extensive revision, which is driving us to update our alternate estimates. The revision affects all of the BEA's data extending back to 1929.

The following chart shows our updated model for estimating the median household income in the U.S. Our basic methodology for generating the model remains unchanged, where we recognize a break in the data that is attributable to changes in the U.S. Census Bureau's questionnaire for collecting income data as part of its monthly Current Population Survey that was implemented in March 2015.

Trailing Year Average Annualized Wage and Salary Income per Capita versus Median Household Income, January 2000 to June 2018

In terms of basic stats, for the period from January 2000 through June 2018, our alternate median household estimates are reliably within one standard deviation of Sentier Research's estimates for over 70% of the observations, are within two standard deviations for 95% of the observations, and are within three standard deviations for 99.5% of the observations.

Per the BEA's 30 July 2018 data revision, our previously reported estimate for May 2018 of $61,497 has been revised upward by $164 (or 0.27%) to $61,661. Our alternate method's estimate of U.S. median household income in the U.S. for June 2018 is $61,891, an increase of about 0.4% over the revised May 2018 estimate.

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: 30 July 2018.

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: 30 July 2018.

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: 12 July 2018.

References

Sentier Research. Household Income Trends: January 2000 through May 2017, March 2018 through June 2018. [Excel Spreadsheet with Nominal Median Household Incomes for January 2000 through January 2013 courtesy of Doug Short]. [PDF Document]. Accessed 27 June 2018. [Note: We've converted all data to be in terms of current (nominal) U.S. dollars to develop the analysis presented in this series.]

Labels: ,

About Political Calculations

Welcome to the blogosphere's toolchest! Here, unlike other blogs dedicated to analyzing current events, we create easy-to-use, simple tools to do the math related to them so you can get in on the action too! If you would like to learn more about these tools, or if you would like to contribute ideas to develop for this blog, please e-mail us at:

ironman at politicalcalculations.com

Thanks in advance!

Recent Posts

Stock Charts and News

Most Popular Posts
Quick Index

Site Data

This site is primarily powered by:

This page is powered by Blogger. Isn't yours?

CSS Validation

Valid CSS!

RSS Site Feed

AddThis Feed Button

JavaScript

The tools on this site are built using JavaScript. If you would like to learn more, one of the best free resources on the web is available at W3Schools.com.

Other Cool Resources

Blog Roll

Market Links

Charities We Support
Recommended Reading
Recently Shopped

Seeking Alpha Certified

Archives
Legal Disclaimer

Materials on this website are published by Political Calculations to provide visitors with free information and insights regarding the incentives created by the laws and policies described. However, this website is not designed for the purpose of providing legal, medical or financial advice to individuals. Visitors should not rely upon information on this website as a substitute for personal legal, medical or financial advice. While we make every effort to provide accurate website information, laws can change and inaccuracies happen despite our best efforts. If you have an individual problem, you should seek advice from a licensed professional in your state, i.e., by a competent authority with specialized knowledge who can apply it to the particular circumstances of your case.