Sep 12, 2023 - Economy
Real incomes fell last year. No wonder Americans were bummed out
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Americans' real incomes fell in 2022 from the previous year, new Census data show, as record-high inflation took a bite out of our paychecks.
Why it matters: The decline explains why Americans have felt so meh about the strong economy over the past couple years.
- To be clear: It's hard to be amped up about the economy when you're making less money (and prices are soaring.)
- It's another reason why the White House's Bidenomics pitch, an attempt to tell a feel-good story about the economy, seems to have fallen flat so far.
By the numbers: Real median household income fell by 2.3% to $74,580.
- Go deeper: If you break out the numbers by race, almost all groups saw relatively little change from 2021. The only group that experienced a significant decrease in real income was non-Hispanic white households — which saw a 3.6% drop.
- The income measure includes wages and earnings from work, as well as Social Security benefits, unemployment insurance, retirement income, dividends and public assistance. It's calculated pre-tax.
- Last year's historically high inflation caused the decline — the nominal income numbers were adjusted by a 7.8% inflation rate, the Census said.
Stunning stats: Americans with no high school diploma saw their real incomes increase by 6.4%.
- 65.6% of women worked full time last year — the largest share on record back to 1967.
What's next: The income picture looks better in 2023, as inflation has eased — Americans are finally starting to see a rise in real wages and incomes.
- Real median family income is up 1.2% so far this year, according to an analysis of federal data from the Council of Economic Advisors.
