household income increased from $70,200 to $74,600, at an annual average rate of 2.1%. More recent trends in household income suggest that the effects of the Great Recession may finally be in the past. Indeed, the median household income in 2015 – $70,200 – was no higher than its level in 2000, marking a 15-year period of stagnation, an episode of unprecedented duration in the past five decades. This time it took until 2015 for incomes to approach their pre-recession level.
7 Yet household incomes were slow to recover from the 2001 recession and it was not until 2007 that the median income was restored to about its level in 2000.īut 2007 also marked the onset of the Great Recession, and that delivered another blow to household incomes. The first recession, lasting from March 2001 to November 2001, was relatively short-lived. The shortfall in household income is attributable in part to two recessions since 2000. household income would be about $87,000, considerably higher than its actual level of $74,600. If there had been no such slowdown and incomes had continued to increase in this century at the same rate as from 1970 to 2000, the current median U.S. From 2000 to 2018, the growth in household income slowed to an annual average rate of only 0.3%. In these three decades, the median income increased by 41%, to $70,800, at an annual average rate of 1.2%. Most of the increase in household income was achieved in the period from 1970 to 2000. 6 (Incomes are expressed in 2018 dollars.)īut the overall trend masks two distinct episodes in the evolution of household incomes (the first lasting from 1970 to 2000 and the second from 2000 to 2018) and in how the gains were distributed. 5 This was 49% higher than its level in 1970, when the median income was $50,200. With periodic interruptions due to business cycle peaks and troughs, the incomes of American households overall have trended up since 1970. Household incomes are growing again after a lengthy period of stagnation Economic inequality, whether measured through the gaps in income or wealth between richer and poorer households, continues to widen. Household incomes have grown only modestly in this century, and household wealth has not returned to its pre-recession level. Gains on the jobs front are also reflected in household incomes, which have rebounded in recent years.īut not all economic indicators appear promising.
The unemployment rate in November 2019 was 3.5%, a level not seen since the 1960s. The labor market is on a job-creating streak that has rung up more than 110 months straight of employment growth, a record for the post-World War II era. Barely 10 years past the end of the Great Recession in 2009, the U.S.