Recession Officially Over for Median Household Income


The Census Bureau has finally gotten around to calculating household income for 2016, and the news is good: adjusted for inflation, income was up 3.2 percent previous year. The lack of meaningful raises has left many people feeling left behind economically, a sentiment that factored into the 2016 elections.

Regionally, the Northeastern United States has the highest median household income at $64,390.

The Census data said it changed its income questions in 2014, which makes it hard to make comparisons before that year.

Family households have a real median income of $75,062, and non-family households bring in $35,761.

The number of people in poverty nationally in 2016 was 40.6 million, which was 2.5 million fewer than in 2015, the bureau said.

Median household income is one of the most important signs of how the middle class is doing, and the Census report shows good progress by low- and middle-income Americans in the final two years of the Obama administration.

"Over the past several decades Census Bureau reports have found that the average one year risk of poverty tends to vary between 11 and 15 percent". Median income declined and the poverty rate rose during former President Obama's first term as the nation struggled to recover from the Great Recession before starting to improve in his second term.

The bureau reported the median income of non-Hispanic white households at $65,041, black households at $39,490, and Hispanic households at $47,675.

That's only the "official" poverty rate, though, which only takes into account before-tax income. Hispanics saw their poverty rate fall to 19.4%, down from 21.4%.

The percentage of people without health insurance was 8.8%, a decline of 0.3%. In the two years following the end of the Great Recession, median household income fell almost $2,000 to $50,054 in 2011. The rest had Medicare, Medicaid or military coverage. Tom Hirschl, sociologist and co-author of "Chasing the American Dream: Understanding What Shapes Our Fortunes", says that while the numbers today reflect an incremental improvement, middle-class and working-class Americans still feel insecure about their economic future.

But medical expenses increased the number of people in poverty by 10.5 million.