Inflation dragged real US household incomes down 2.3% in 2022
US INFLATION-ADJUSTED household income decreased 2.3 per cent in 2022 from a year earlier, highlighting the toll of a higher cost of living for American families.
The median income last year was US$74,580 compared with US$76,330 in 2021, according to the Census Bureau’s annual report on income, poverty and health insurance coverage.
The Tuesday data represent a concerning picture of American families’ economic health in the second year of Joe Biden’s presidency, after pandemic-related turbulence in 2020 gave way to soaring inflation during the following two years.
At the end of 2022, annual inflation stood at 6.5 per cent after reaching a four-decade high in June that year. It’s since cooled.
The report also showed the US poverty rate – which is calculated before taxes and excludes stimulus payments and tax credits – edged lower to 11.5 per cent from 11.6 per cent in the prior year.
In 2019, the poverty rate dropped to the lowest level in Census data back to 1959. Last year, 37.9 million people were in poverty, little changed from the prior year. The US poverty rate has been roughly cut in half over the past six decades.
While the official poverty rate ticked down, a supplemental measure – which is based on post-tax income and includes government-transfer payments like stimulus checks – rose to 12.4 per cent last year. That’s up 4.6 percentage points from 2021, which likely reflected the end of pandemic-era relief programmes.
The so-called Gini index – a measure of income inequality – fell to 0.488, indicating a narrowing of the gap as pay among the highest earners decreased. A Gini coefficient of zero reflects perfect equality, where all income or wealth values are the same, while a Gini coefficient of 1 (or 100 per cent) reflects maximum inequality.
Median incomes at the 90th percentile fell to US$216,000 in 2022, while incomes for those among the bottom 10th ticked up to US$17,100. BLOOMBERG
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