posted on 04 March 2015
from Sentier Research
According to new estimates derived from the monthly Current Population Survey (CPS) median annual household income in January 2015 was $54,332, an increase of $321 that was not statistically significant from the December median of $54,011. This apparent increase in real median income was due largely to the 0.7 percent decline in consumer prices in January. While not statistically significant, this reading extends the series of upward movements in our median household income estimates.
The Sentier Household Income Index stands at 96.1 (January 2000 = 100.0) indicating that median household income in January 2015 was 3.9 percent lower than January 2000.
Real median annual household income has shown some improvement since the low point in our household income series that occurred in August 2011. Median income in January 2015 ($54,332) was 3.4 percent higher than in January 2014 ($52,559), and 6.3 percent higher than in August 2011 ($51,126). The period since August 2011 has been marked by an uneven, but generally upward trend in the level of real median annual household income. Many of the month-to-month changes in median income during this period have not been statistically significant. However, the cumulative effect of the various month-tomonth changes since August 2011 resulted in the income improvement noted above. (See Figure 1 - full report here)
According to Gordon Green of Sentier Research:
The January reading on the labor market from the U.S. Bureau of Labor Statistics showed a slight worsening compared to December:
Real median annual household income in January 2015 can be put into broader perspective by comparisons with previous levels of household income since the recession began and dating back to the start of the last decade:
The Sentier Household Income Index (HII) shows the value of real median annual household income in any given month as a percent of the base value at the beginning of the last decade (January 2000 = 100.0 percent):
Income amounts in this report are before-tax money income and have been adjusted for inflation; income amounts have been seasonally adjusted, unless otherwise noted.
Estimates of median annual household income and the Household Income Index (HII) provide the only measures of change in household income during 2013 and 2014. The U.S. Census Bureau issued its official estimates of income and poverty for calendar year 2012 in a report released on September 17, 2013.
The estimates in this report are based on the Current Population Survey (CPS), the monthly household survey that provides official estimates of the unemployment rate. The CPS samples approximately 50,000 households and 135,000 household members each month. As is the case with all surveys, the estimates are subject to sampling and nonsampling errors. All comparisons made in the report have been tested and found to be statistically significant at the 90-percent confidence level, unless otherwise noted.
Household income is defined as the sum of the incomes of all household members. Income refers to all sources of money income including earnings from work, Social Security, interest, dividends, cash welfare, retirement pensions, unemployment compensation, veterans' benefits, etc. Income excludes capital gains and losses, and lump-sum, one-time amounts. Household income is measured before the payment of federal and state income taxes and Social Security payroll taxes.
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