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posted on 29 December 2015

Median Household Income Back at Level When Great Recession Began in November 2015.

from Sentier Research

According to new estimates derived from the monthly Current Population Survey (CPS) median annual household income in November 2015 was $56,746. This is comparable to the median income level of $56,714 in December 2007 when the Great Recession began. It compares to $56,688 for October 2015 and $54,172 for November 2014. The Sentier Household Income Index stands at 98.9 (January 2000 = 100.0) indicating that median household income in November 2015 was 1.1 percent lower than January 2000.

Even though the change in this latest monthly reading is not statistically significant, there is a generally upward trend in income that has been evident since the low point in our household income series that occurred in August 2011. Median income in November 2015 ($56,746) was 4.8 percent higher than in November 2014 ($54,172), and 9.4 percent higher than in August 2011 ($51,875). 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)

[click on image to enlarge]


According to Gordon Green of Sentier Research:

Even though median annual household income did not increase significantly in November 2015, we continue to see an upward trend in income that has been evident since the low point in August 2011. We have now recaptured all of the income losses that have occurred since the beginning of the last recession in December 2007. The November 2015 median is now only 1.1 percent lower than the median of $57,388 in January 2000, the beginning of this statistical series.

The November reading on the labor market from the U.S. Bureau of Labor Statistics showed some improvement compared to October:

  • The official unemployment rate in November 2015 was 5.0 percent, the same level as October.
  • However, the median duration of unemployment was 10.8 weeks in November 2015, down from 11.2 weeks in October 2015.
  • The broader measure of employment hardship, which includes the unemployed, marginally attached workers (of which discouraged workers are a subset), and persons working part-time for economic reasons, was 9.9 percent in November 2015, not significantly different from October 2015 (9.8 percent).

Real median annual household income in November 2015 can be put into broader perspective by comparisons with previous levels of household income since the last recession began and dating back to the start of the last decade:

  • The November 2015 median income of $56,746 is 1.9 percent higher than the median of $55,676 in June 2009, the end of the recent recession and beginning of the "economic recovery."
  • The November 2015 median has now surpassed the median of $56,714 in December 2007, the beginning month of the recession that occurred almost eight years ago.
  • And the November 2015 median is now only 1.1 percent lower than the median of $57,388 in January 2000, the beginning of this statistical series.

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):

  • The Sentier HII for November 2015 stood at 98.9, about the same level as December 2007 (98.8 percent) when the "great recession" began, and 97.0 in June 2009, when the "economic recovery" subsequently began.
  • The Sentier HII in August 2011 was 90.4 compared to 98.9 in November 2015.


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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