Unexpectedly Intriguing!
February 7, 2020

Sentier Research has issued their estimate of median household income in the United States for December 2019, finding the typical income earned by an American household was $65,666 for the month, down 0.6% from the firm's initial estimate of $66,043 for November 2019.

The following chart shows the nominal (red) and inflation-adjusted (blue) trends for median household income in the United States from January 2000 through December 2019, where the newest nominal data point represents the second month-over-month decline since the October 2019 record high value of $66,465. The inflation-adjusted figures are presented in terms of constant December 2019 U.S. dollars.

Median Household Income in the 21st Century: Nominal and Real Estimates, January 2000 to December 2019

Meanwhile, the year-over-year growth rate of median household income has likewise dropped, with December 2019 showing year over year growth of 3.4%, or 1.1% after adjusting for inflation.

Median Household Income in the 21st Century: Year Over Year Growth Rate, January 2001 to December 2019

With that final estimate, 2019 saw median household income for Americans reach new highs, though the year saw much more volatility in income growth than 2018.

Analyst's Notes

The U.S. Census Bureau has revised its monthly population estimates going back to April 2010, which means we've had to update the alternate methodology we developed to estimate median household income using aggregate personal wage and salary income and population data. At the same time, the BEA issued minor revisions its personal income data for October and November 2019, which we've also captured in our analysis. The following chart shows the relationships between average per capita income and median household income in the period from January 2000 through December 2019.

Trailing Year Average Annualized Wage and Salary Income per Capita versus Median Household Income, January 2000 to December 2019

The following chart shows the modeled estimates of median household income developed using our alternate methodology over the last 20 years. We estimate a median household income estimate of $66,394 for December 2019, which is 1.1% higher than Sentier Research's survey-based estimate for the month.

Median Household Income in the 21st Century: Nominal and Real Modeled Estimates, January 2000 to December 2019

In generating inflation-adjusted portion of the Median Household Income in the 21st Century charts and the corresponding year-over-year growth rate 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.

References

Sentier Research. Household Income Trends: January 2000 through December 2019. [Excel Spreadsheet with Nominal Median Household Incomes for January 2000 through January 2013 courtesy of Doug Short]. [PDF Document]. Accessed 6 February 2020. [Note: We've converted all data to be in terms of current (nominal) U.S. dollars.]

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 January 2020. Accessed: 14 January 2020.

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: 31 January 2020. Accessed: 30 January 2020.

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: 31 January 2020. Accessed: 30 January 2020.

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