The average household income in the U.S. fell for the third year in a row in 2022, according to The Wall Street Journal (subscription).
What’s going on: “Americans’ inflation-adjusted median household income fell to $74,580 in 2022, declining 2.3% from the 2021 estimate of $76,330, the Census Bureau said Tuesday. The amount has dropped 4.7% since its peak in 2019.”
- Inflation reached a 40-year high last summer “as the pandemic upended supply chains and the Ukraine war drove up energy prices.”
By region and race: Median incomes dropped by 3% to 5% in the Northeast, West and Midwest, but were unchanged in the South.
- “White households saw median income decline by 3.6% in 2022 from the prior year to $81,100, while incomes in Black, Asian and Hispanic households were essentially unchanged.”
Earnings: Wages and salaries “showed a mixed picture,” with average earnings in 2022 declining 2.2% from 2021.
- Among full-time, year-round workers, average earnings decreased more moderately, by 1.3%.
- The 2022 poverty rate was similar to the 2021 rate.
A turning tide? In recent months, however, inflation has improved following benchmark interest-rate hikes, giving a boost to Americans’ purchasing power.
- “Shifting into the present and into the future, the prospects are better for wages to make up for some of the ground lost during the last couple of years,” one source told the Journal.
- Beginning at the end of 2022, wage growth outstripped inflation, and in July inflation-adjusted pay increased 3%.