Sep 12, 2023 - Economy

Real incomes fell last year. No wonder Americans were bummed out

U.S. real median household income
Data: Census Bureau; Note: In 2022 inflation-adjusted dollars; Methodology changes include updated processing system in 2017 and redesigned income questions in 2013; Chart: Axios Visuals

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.

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