Motio Research's initial estimate of U.S. median household income in August 2024 is $81,562. This figure is $3,017 (3.8%) higher than the firm's initial estimate of median household income in July 2024 of $78,545.

That very large increase followed the U.S. Census Bureau's release of its annual median household income estimate for 2023 of $80,610, which prompted the firm to update and revise its monthly estimates. Motio Research's monthly estimates of median household income are produced using income data collected by the U.S. Census Bureau as part of its monthly Current Population Survey.

For its Household Income Index, the firm adjusts its monthly estimates to account for the effects of seasonality and inflation in its data, which is then indexed with the median household income of January 2010 assigned a value of 100. The following screenshot of Motio Research's interactive chart shows how this index has changed from January 2010 through August 2024:

After its revisions, Motio's estimate of nominal median household income in July 2024 increased to $81,010, some 3.1% above its initial estimate. The month-over-month increase in Motio Research's non-inflation adjusted, non-seasonally adjusted estimate for August 2024 is about 0.7%.

Analyst's Notes

Political Calculations produces estimates of median household income that complement the monthly survey-based estimates produced by Motio Research. Our initial estimate of median household income for August 2024 is $81,817. This estimate is based upon our alternate methodology, which we've updated this month.

Like Motio Research's August 2024, it shows the effects of a large revision over the initial figure of $78,280 for July 2024, a 4.5% increase.

The latest update to Political Calculations' chart tracking Median Household Income in the 21st Century shows the nominal (red) and inflation-adjusted (blue) trends for median household income in the United States from January 2000 through July 2024. The inflation-adjusted figures are presented in terms of constant July 2024 U.S. dollars and are not seasonally adjusted, unlike the data used to produce Motio Research's Household Income index:

Unlike Motio Research, our methodology incorporates aggregate wage and salary data that was also subject to its own substantial revision on 27 September 2024 by the Bureau of Economic Analysis. These revisions affected previously reported data covering the period from January 2019 through July 2024. The next chart shows both the previous and newly revised estimates for the aggregate wage and salary data for the U.S. over this period and also the percentage change from the previously reported figures.

The combined effects of these revisions has prompted us to update the methodology for our complementary method, in which the data indicates we've entered a new relationship between the average per capital wage and salary income derived from the BEA's revised figures after March 2021.

We called this an initial cut because we're debating if the data since March 2021 indicates more than one change in the relationship between median household income and trailing year average per capita earned income has taken place. There is however absolutely no question that this relationship is significantly different from the relationships that existed through March 2021, which can be seen in this chart.

The period after March 2021 coincides with a period of persistent elevated inflation in the U.S. economy whose origin traces back to that month. We think the period after March 2022 may be different because it coincides with the delayed actions by the Federal Reserve to combat the high inflation that was unleashed a year earlier.

Our initial post-revision median household income estimates show a drop-off in the median household income estimates from March 2021 to April 2021, which represents the transition from the previously established relationship to the post-March 2021 relationship. We anticipate we'll be refining our methodology for this period in the months ahead.

References

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: 27 September 2024. Accessed: 27 September 2024.

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: 27 September 2024. Accessed: 27 September 2024.

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. Not seasonally adjusted. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 11 September 2024. Accessed: 11 September 2024.

Image credit: U.S. Census Bureau. We modified the public domain image to make it more generally applicable beyond reporting the median household income from 2022.