econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 02 February 2017

December 2016 Median Household Income Declines

from Sentier Research

According to new data derived from the monthly Current Population Survey (CPS), median annual household income in December 2016 was $57,827, $558 (or 1.0 percent) lower than the November 2016 median of $58,385.

Median household income at the beginning of the great recession in December 2007 was $57,886. The Sentier Household Income Index (HII) for December 2016 was 98.7, significantly lower than the November reading of 99.7 (January 2000 = 100). The level of real median annual household income in January 2000 was $58,574, which marks the beginning of this statistical series.

The December decline in median annual household income wipes out most of the increase in income that had been evident since May 2016, and returns it to a level of income that is not significantly different than that at the beginning of the great recession ($57,886). More broadly, there has been a general upward trend in median household income since the post-recession low point reached in August 2011. This upward trend was initially marked by monthly movements, both up and down. Many monthly changes were not statistically significant. By the summer of 2014 however, that uneven trend became dominated by a series of significant monthly increases. However, the median income figures that we have reported for the past several months have flattened out this trend. (See Figure 1.)

Median annual household income in December 2016 ($57,827) was 0.9 percent lower than in December 2015 ($58,356), but 9.1 percent higher than in August 2011 ($53,019). This general upward trend since August 2011 reflects, in part, the low level of inflation as measured by the CPI for all items used in this series, as opposed to the CPI less food and energy. However, energy prices recently have been on an upswing, contributing to the 0.3 2 percent increase in the CPI for all items between November 2016 and December 2016, and playing a significant role in the reported decline in median income this month.

[click on image to enlarge]

/images/z%20SentierResearch.png

According to Gordon Green of Sentier Research:

Not only has median annual household income in 2016 has not been able to maintain the momentum that it achieved during 2015, it slipped by a formidable 1.0 percent in our latest reading for December. We continue to monitor the course of inflation, as this has a significant effect on the trend in real median annual household income. With the recent uptick in energy prices, the CPI for all items increased by 0.3 percent between November 2016 and December 2016. We are now at a point now where median household income is not significantly different than at the beginning of the great recession in December 2007, and 1.3 percent lower than January 2000, the beginning of this statistical series.

The December reading on the labor market from the U.S. Bureau of Labor Statistics shows a situation that is not that much different than November:

  • The official unemployment rate in December 2016 was 4.7 percent, not significantly different than the November 2016 rate (4.6 percent).
  • However, the median duration of unemployment was 10.3 weeks in December 2016, slightly higher than November 2016 (10.1 weeks).
  • 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 9.2 percent in December 2016, not significantly different than the November 2016 reading (9.3 percent).

Real median annual household income in December 2016 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 December 2016 median income of $57,827 is 1.8 percent higher than the median of $56,827 in June 2009, the end of the recent recession and beginning of the "economic recovery."
  • The December 2016 median is not significantly different than the median of $57,886 in December 2007, the beginning month of the recession that occurred nine years ago.
  • And the December 2016 median is now 1.3 percent lower than the median of $58,574 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 stood at 98.7 in December 2016, about the same as December 2007 (98.8) when the "great recession" began, but higher than June 2009 (97.0), when the "economic recovery" subsequently began.
  • The Sentier HII was 90.5 in August 2011, the low point in our household income series, compared to 98.7 in December 2016.

Notes:

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.


>>>>> Scroll down to view and make comments <<<<<<




Permanent link to most recent post on this topic

Click here for Historical Releases Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted. You can also comment using Facebook directly using he comment block below.






Econintersect Economic Releases


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
Slow Economic Growth Will Be Around For A Long Time
The Job Guarantee, Wage-Price Inflation And Alternative Solutions: Part 2
News Blog
NASA Precise Landing Technologies Tested On Vertical Testbed Rocket
March 2017 Conference Board Consumer Confidence Highest Since 2000
Richmond Fed Manufacturing Survey Again Improves In March 2017.
Case-Shiller 20 City Home Price Index January 2017 Shows 5.7 % Year-over-Year Growth
A Changing Rulebook To Tame The New Global Arms Race
Infographic Of The Day: Chart: Understanding Alphabet's 4 Billion Dollar In "Other Bets"
Early Headlines: Asia Stocks And Dollar Up, Oil, Gold Steady, Obama Climate Policies Gone, US Oil Glut, Euro Surges, Shorts Remain, Trump Into Yemen?, Iran-Russia Deals, Cat 4 Cyclone Hits Oz, And More
March 27, 2017 Weather and Climate Report - Will the MJO Deliver a Nino?
The Most Reputable Companies Worldwide
Gut Bacteria Play A Role In Long-term Weight Gain
What We Read Today 27 March 2017 - Special Public Edition
Is Less More In The Smartphone Market
Average Gasoline Prices for Week Ending 27 March 2017 Statistically Unchanged - Again
Investing Blog
The Dollar's Coming Impact On Markets
The Real 401k Plan Manager 27 March 2017
Opinion Blog
Macron May Lead But Le Pen Remains The Big Story
Is The 20th Century Still The 'Hayek Century'?
Precious Metals Blog
These Gold Stocks Will Produce Much Bigger Gains Than Gold Itself
Live Markets
28Mar2017 Market Update: Wall Street Ends 8 Day Losing Streak, DOW Up Triple Digits After Strong Consumer Confidence Number, US Dollar Climbs Higher, Energy Up 1%
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government































 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved