posted on 30 March 2017
from Sentier Research
According to new data derived from the monthly Current Population Survey (CPS), median annual household income in February 2017 was $58,714, $588 or about 1.0 percent higher than the January 2017 median of $58,126.
Median household income at the beginning of the great recession in December 2007 was $58,226, so we have now surpassed that level. The Sentier Household Income Index (HII) for February 2017 was 99.7, significantly higher than the January reading of 98.7 (January 2000 = 100). The level of real median annual household income in January 2000 was $58,918, which marks the beginning of this statistical series.
The monthly pattern for median annual household income has been marked by some sharp increases and decreases over the past several years. 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, with the exception of some minor ups and downs, median annual household income has essentially been flat over the past year. (See Figure 1.)
Median annual household income in February 2017 ($58,714) was not significantly different than February 2016 ($58,619), but was 10.1 percent higher than in August 2011 ($53,330). 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. Energy prices have recently been fluctuating, which has had an effect on the CPI for all items. The CPI for all items increased by only 0.1 percent
According to Gordon Green of Sentier Research:
The February reading on the labor market from the U.S. Bureau of Labor Statistics shows a slight improvement compared to January:
Real median annual household income in February 2017 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 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.
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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