USA: Record Growth in Household Income, Poverty Rate Decreased

Household income in the United States increased by a record more than five percent last year after years of stagnation, according to the latest data from the U.S. government released on Tuesday.

According to the data from the local statistical office, the average household income in the United States in 2015 rose by 5.2 percent to $56,500, the highest level since 2007, largely due to increased employment. This is also the most significant jump in household income since 1968 when relevant statistics began to be recorded.

In a conference call, Trudi Renwick from the statistical office stated that, on average, income increased across all categories of households. “It has increased in all age groups of heads of households. And it has risen in almost all racial groups,” except for the Asian group, she said.

Although the economy has recovered from the crisis during the period from 2007 to 2009 and the stock market is booming, millions of Americans seem to have been left out of that recovery. Although the average household income is now lower compared to pre-crisis levels, the relevant office indicates that the data suggest that the situation is improving.

Chris Christopher from IHS Global Insight expects further strengthening of income during 2017 in the context of increased employment and moderate inflation. The unemployment rate has slid from a high of 10 percent in October 2009 to 4.9 percent last month.

With the increase in income, the number of people living in poverty decreased in 2015 by 3.5 million to 43.1 million. This brought the poverty rate down to 13.5 percent, from 14.8 percent in 2014.

The poverty rate has been continuously decreasing since 2010 when it reached its highest level in 17 years, and its decline of 1.3 percentage points is the largest since 1999, the statistical office reported.

Despite the widespread recovery, weak progress has been recorded regarding income inequality, economists emphasize.

“The economic recovery finally began last year for tens of millions of American families. We need to ensure that the economy continues on this path and is not undermined by poor political decisions,” said Elis Gould, a senior economist at the Economic Policy Institute in Washington.