Median household income slipped in March, according Sentier Research, which publishes monthly updates from Census Bureau data. At Advisor Perspectives, Doug Short
synopsizes the report and produces some explanatory charts that he's given me permission to republish.
On a month-by-month basis, nominal median household income was down $307 and up $1,104 when measured against last March. In real (inflation-adjusted) dollars, median income was down $436 month over month and up $1,116 year over year. That's a 2.1 percent yearly increase.
Although the economic recovery has boosted real median income well above its low point in August 2011, after nearly six years of expansion since the Great Recession, the real median is still $3,020 lower than its high point in January 2008. That's 5.3 percent less. And it's $3,125 below where it was in 2002.
Short notes:
Let's take a closer look at the monthly data since the end of the Great Recession. The adjacent chart highlights the real monthly median values since 2008. The right axis shows the same scale as the chart above—the percent change from the real household income value at the start of the 21st century. The March 2015 real median annual income is 4.6% below our turn-of-the-century starting point and 5.3% below its interim high in January 2008. [...]
As the excellent data from Sentier Research makes clear, the mainstream U.S. household was struggling before the Great Recession. At this point, real household incomes are in worse shape than they were in mid-2009 when the recession ended.
There is more analysis below the fold.
It's important to point out, as blogger New Deal democrat regularly does, that median household income is not the same as median wages. A household's income could come from two or more people while the wages metric applies only to a single earner. As I wrote last month:
For example, in the case of families where someone has retired, real median household income could fall at the same time as real median wages are rising. Although baby boomers, the first wave of whom turned 65 in 2011, have not been retiring as fast as expected, as they continue to age, they will contribute to the lowering of real median household income as they do retire.
We know, however, from other data that real median wages have been stagnant for decades before the Great Recession, with a three-year surge at the end of the 1990s. Last year, the buying power of wages rose, bolstered by the fall of the CPI thanks to those aforementioned lower oil prices. In the fourth quarter of 2014, real median weekly wages climbed just 0.5 percent from the previous year, to $799. That was better than in the fourth quarter of 2013, when it rose just 0.2 percent, or in 2012 when it fell 0.5 percent and 2011 when it fell 1.7 percent. Nonetheless, it's been paltry gain, and they still [have] a long way to catch up to where they were eight years ago, not to mention 13 years ago.
A week ago, the Bureau of Labor Statistics
announced the change from February to March in real average wages. The average rose 0.1 percent, seasonally adjusted. That change is a product of a 0.3-percent increase in average hourly earnings offset by a 0.2-percent increase in the Consumer Price Index for All Urban Consumers. Real average weekly earnings decreased by 0.2 percent over the month because of a 0.3-percent reduction in the average workweek.
Note that this is the mean, not the median. The true impact of increases in real average wages is skewed somewhat because gains for earners of higher wages can lift the average even when earners of lower wages are making no gains.