Median household income rose 3.2 percent to $59,039 last year, marking the second consecutive year of income gains since the economic crisis, the U.S. Census Bureau said Tuesday.
Median household income is one of the most important signs of how the middle class is doing, and the Census report shows good progress by low- and middle-income Americans in the final two years of the Obama administration.
The latest household income figure is the highest ever reported by the Census Bureau - eclipsing the peak of $58,665 reached in 1999. But Census officials cautioned against comparing the figures because the bureau has changed its methodology over the years. In 2015, household incomes rose 5.2%, the largest increase since records began in 1967. It is based on interviews with 70,000 households and includes detailed data on incomes and poverty across a range of demographic groups. The 12.7 percent poverty rate in 2016 was a decrease of 0.8 percentage points from 13.5 percent in 2015, it said. The official poverty measure dropped to 12.7 percent, down from 13.5 percent last year, and 14.8 percent the year before that.
Still, the Census data is closely watched because of its comprehensive nature.
Sheldon Danziger, head of the Russell Sage Foundation poverty research group, said "expanding the earned income tax credit. and more spending on badly needed infrastructure and early childhood education" would lift employment and productivity.
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The percentage of people without health insurance was 8.8%, a decline of 0.3%.
More than 40.6 million people in the United States were living in poverty previous year, 2.5 million fewer than in 2015 and 6.0 million fewer than in 2014, the U.S. Census Bureau said in its annual report on income, poverty and health insurance coverage. Still, almost 41 million Americans remained in poverty in 2016.
Another trouble spot can be found for full-time male workers, who saw their incomes slide past year.
"Real median household income has finally completed its nine-year slog of digging out of the ditch", said Chris Christopher, executive director of IHS Markit. Women now make 80.5 cents to every $1 earned by men, or an increase of 1.1 percent from 2015.