Unexpectedly Intriguing!
June 4, 2020

Political Calculations' initial estimate of median household income in May 2020 is $66,027, down 0.6% from March 2020's initial estimate of $66,458.

The change is primarily the result of the aggregate loss of wage and salary income recorded for the month as a consequence of the business closures and stay-at-home orders imposed by state and local governments in response to the outbreak of the coronavirus pandemic in the U.S. in March 2020, which has resulted in large scale job losses.

While this figure is based on the Bureau of Economic Analysis' current estimates of aggregate personal income, we think they are underestimating both the extent of job loss and the amount of lost wage and salary income being experienced by millions of Americans, particularly in lower income-earning occupations. We anticipate the BEA will revise its estimates for the month lower in future months as it replaces projections based on pre-coronavirus recession trends with actual income data as it becomes available.

In the meantime, the following chart shows the nominal (red) and inflation-adjusted (blue) trends for median household income in the United States from January 2000 through April 2020. The inflation-adjusted figures are presented in terms of constant April 2020 U.S. dollars.

Median Household Income in the 21st Century: Nominal and Real Modeled Estimates, January 2000 to April 2020

Looking at the year-over-year rate of change for median household income, the following chart confirms the nominal trend has nosed over and begun sharply decelerating at the fastest rate recorded to date in the 21st century.

Median Household Income in the 21st Century: Year Over Year Growth Rate, January 2001 to April 2020

With weekly unemployment claims continuing to rise in May 2020, we anticipate more rough news for median household income in the U.S. in our next analysis.

Analyst's Notes

The peak value for nominal median household income of $66,626 in February 2020 has been revised up from our previous estimate of $66,533. We continue to anticipate the aggregate personal income data we use in generating our estimates will be subject to substantial revision given the extent of the coronavirus recession's disruption to the U.S. economy.

Since our estimates are tied to that data, until those revisions occur, we think our estimates will overstate the level of median household income in the U.S. until the economic situation stabilizes.

Other Analyst's Notes

Sentier Research suspended reporting its monthly Current Population Survey-based estimates of median household income, concluding their series with data for December 2019. In its absence, we are providing the estimates from our alternate methodology. Our data sources are presented in the following section.

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: 10 April 2020. Accessed: 10 April 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: 30 April 2020. Accessed: 1 May 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: 30 April 2020. Accessed: 1 May 2020.

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

Useful Election Data
Charities We Support
Shopping Guides
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.