Political Calculations' initial estimate of median household income in December 2022 is $79,405, an increase of $193 (or 0.2%) from the initial estimate of $79,212 in November 2022.

The latest update to Political Calculations' chart tracking Median Household Income in the 21st Century reflects the results of that revision, showing the nominal (red) and inflation-adjusted (blue) trends for median household income in the United States from January 2000 through December 2022. The inflation-adjusted figures are presented in terms of constant December 2022 U.S. dollars.

Adjusted for inflation, December 2022's estimated median household income represents a new record peak for this demographic characteristic, exceeding the revised December 2021's previous peak by $1,499. We also observe the effect of inflation continues to be muted, coinciding with the substantial decline in oil prices since the early June 2022. That decline has offset the effect of other rising prices, where increases in the cost of food has been significant.

Taking a step back to look at the average personal income earned by individual Americans, we find their inflation-adjusted income has not yet recovered to its December 2021 level.

Zooming in to look just at the Biden era, we see that nominal earned income growth slowed considerably after December 2021.

Adjusted for inflation, personal earned income growth shrank in the first half of 2022 before bottoming in June 2022, coinciding with the nation's technical recession. It grew at a relatively steady rate in the second half of 2022.

Analyst's Notes

The U.S. Census Bureau released updated population estimates extending back to March 2020. These changes were both positive and progressively substantial. By positive, we mean that all estimates were increased over their previously reported level. By progressively substantial, we mean that the smallest adjustment (+1,000) was made for March 2020, with most months seeing a progressively larger upward adjustment ending with November 2022 seeing the biggest increase (+744,000). That's a substantial change.

By contrast, the BEA made minor downward adjustments to its aggregate wage and salary data for only the months of October 2022 (-0.1%) and November 2022 (-0.3%).

The combined effect of these changes is most notable for November 2022. As noted earlier, our pre-revision median household income estimate for month was $79,212. November 2022's estimate fell by $135 (-0.2%) to $79,077 after these revisions superseded the previous data. Revisions in our estimates of median household income for the other months from March 2020 through October 2022 are smaller.

During March 2023, the U.S. Census Bureau will collect survey data from roughly 75,000 households for its Annual Social and Economic Supplement. It will take nearly six months to analyze the data it compiles before presenting its annual estimate of the U.S. median household income for the 2022 calendar year on Friday, 8 September 2023.

References

U.S. Bureau of Economic Analysis. Table 2.6. Personal Income and Its Disposition, Monthly, Personal Income and Outlays, Not Seasonally Adjusted, Monthly, Middle of Month. Population. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 27 January 2023. Accessed: 27 January 2023.

U.S. Bureau of Economic Analysis. Table 2.6. Personal Income and Its Disposition, Monthly, Personal Income and Outlays, Not Seasonally Adjusted, Monthly, Middle of Month. Compensation of Employees, Received: Wage and Salary Disbursements. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 27 January 2023. Accessed: 27 January 2023.

U.S. Department of Labor Bureau of Labor Statistics. Consumer Price Index, All Urban Consumers - (CPI-U), U.S. City Average, All Items, 1982-84=100. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 12 January 2023. Accessed: 12 January 2023.

Political Calculations' initial estimate of median household income in November 2022 is $79,212, an increase of $399 (or 0.5%) from the initial estimate of $78,813 in October 2022.

The latest update to Political Calculations' chart tracking Median Household Income in the 21st Century reflects the results of that revision, showing the nominal (red) and inflation-adjusted (blue) trends for median household income in the United States from January 2000 through November 2022. The inflation-adjusted figures are presented in terms of constant November 2022 U.S. dollars.

Adjusted for inflation, November 2022's estimated median household income represents a new record peak for this demographic characteristic, exceeding the December 2021's previous peak by $1,031. The chart also confirms the effect of inflation has been muted since June 2022, coinciding with a 35% decline in oil prices since the start of that month. That the overall effect of inflation during these months has been so muted is the result of other prices rising to offset the reduction in oil and fuel prices.

Analyst's Notes

The BEA made very small, nearly unremarkable adjustments to its aggregate wage and salary data for the months of July through October 2022.

Looking forward, we will present our initial estimate for December 2022's median household income on 1 February 2023. Meanwhile, the U.S. Census Bureau will collect survey data from roughly 75,000 households for its Annual Social and Economic Supplement during March 2023, presenting its estimate of the U.S. median household income for the 2022 calendar year sometime in September 2023.

References

U.S. Bureau of Economic Analysis. Table 2.6. Personal Income and Its Disposition, Monthly, Personal Income and Outlays, Not Seasonally Adjusted, Monthly, Middle of Month. Population. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 23 December 2022. Accessed: 23 December 2022.

U.S. Bureau of Economic Analysis. Table 2.6. Personal Income and Its Disposition, Monthly, Personal Income and Outlays, Not Seasonally Adjusted, Monthly, Middle of Month. Compensation of Employees, Received: Wage and Salary Disbursements. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 23 December 2022. Accessed: 23 December 2022.

U.S. Department of Labor Bureau of Labor Statistics. Consumer Price Index, All Urban Consumers - (CPI-U), U.S. City Average, All Items, 1982-84=100. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 13 December 2022. Accessed: 13 December 2022.

Political Calculations' initial estimate of median household income in October 2022 is $78,813, an increase of $218 (or 0.28%) from the initial estimate of $78,595 in September 2022.

The latest update to Political Calculations' chart tracking Median Household Income in the 21st Century reflects the results of that revision, showing the nominal (red) and inflation-adjusted (blue) trends for median household income in the United States from January 2000 through October 2022. The inflation-adjusted figures are presented in terms of constant October 2022 U.S. dollars.

Adjusted for inflation, October 2022's estimated median household income of $78,813 represents a new record peak for this demographic characteristic, exceeding the December 2021's previous peak by $554. However, we also observe the real rate of growth of median household income noticeably slowed in October 2022, suggesting the U.S. economy is slowing after its third quarter rebound.

Turning our attention next to average personal earned income, we find that this measure continues to show signs of a decelerating economy. Average personal wage and salary income is more sensitive than median household income to changing economic conditions, so its trends are of increasing interest with the rising probability of recession taking hold during the next twelve months. Here is the latest update to our chart tracking the average income earned by individual Americans during President Biden's tenure in office.

Here, we confirm the average American's earned income, after adjusting for inflation, is continuing to trend well below its December 2021 peak in terms of constant October 2022 U.S. dollars, and is nearly unchanged from September 2022's revised level. Meanwhile, nominal income growth during 2022 has slowed substantially compared with how fast it grew during 2021. We see the gap between actual average income growth and a simple linear projection based upon 2021's rate of income growth continues to widen.

Since this chart focuses on incomes earned by individual Americans, it is especially relevant to people who live alone. This particular demographic, which represents 29% of all U.S. households, bears the brunt of the erosion of buying power that has accompanied President Biden's inflation during 2022.

Analyst's Notes

The BEA made significant downward adjustments to its aggregate wage and salary data for the months of April through September 2022. Going month by month, April was revised down by 0.29%, May by 0.49%, June by 0.59%, July by 0.58%, August by 0.54%, and September 2022 by 0.50%.

References

U.S. Bureau of Economic Analysis. Table 2.6. Personal Income and Its Disposition, Monthly, Personal Income and Outlays, Not Seasonally Adjusted, Monthly, Middle of Month. Population. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 1 December 2022. Accessed: 1 December 2022.

U.S. Bureau of Economic Analysis. Table 2.6. Personal Income and Its Disposition, Monthly, Personal Income and Outlays, Not Seasonally Adjusted, Monthly, Middle of Month. Compensation of Employees, Received: Wage and Salary Disbursements. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 1 December 2022. Accessed: 1 December 2022.

U.S. Department of Labor Bureau of Labor Statistics. Consumer Price Index, All Urban Consumers - (CPI-U), U.S. City Average, All Items, 1982-84=100. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 10 November 2022. Accessed: 10 November 2022.

Political Calculations' initial estimate of median household income in September 2022 is $78,595, an increase of $457 (or 0.67%) from the initial estimate of $78,075 in August 2022.

The latest update to Political Calculations' chart tracking Median Household Income in the 21st Century reflects the results of that revision, showing the nominal (red) and inflation-adjusted (blue) trends for median household income in the United States from January 2000 through September 2022. The inflation-adjusted figures are presented in terms of constant September 2022 U.S. dollars.

Adjusted for inflation, September 2022's estimated median household income of $78,595 represents a new record peak for this demographic characteristic, exceeding the previous peak of December 2021 by $641.

Since there's growing attention on the rising risk of recession in the United States, we were curious to see how the country's average personal earned income is changing because that measure is more sensitive to changing economic conditions. The next chart tracks the average income earned by individual Americans during President Biden's tenure in office and tells a different story about how working Americans are faring.

This chart reveals the average American's earned income, after adjusting for inflation, has fallen well below its December 2021 peak in terms of constant September 2022 U.S. dollars. We see that real earned income increased during the third quarter of 2022, after having fallen during the first six months of 2022 while the U.S. economy experienced a "technical" recession.

The chart also reveals that nominal income growth since December 2021 has slowed substantially compared with how fast it grew during 2021 as the nation's economy recovered from the lifting of state and local government lockdown measures imposed during 2020's coronavirus pandemic. The gap between actual average income growth and a simple linear projection of 2021's income growth if it had continued has steadily widened throughout 2022.

In other words, nominal income growth has slowed and President Biden's inflation has very noticeably eroded the buying power of individual working Americans during 2022.

Analyst's Notes

After last month's multi-year revision, the BEA only made very minor downward adjustments to its aggregate wage and salary data for the months of July and August 2022, which were marked down by less than 0.02% and 0.04% respectively.

References

U.S. Bureau of Economic Analysis. Table 2.6. Personal Income and Its Disposition, Monthly, Personal Income and Outlays, Not Seasonally Adjusted, Monthly, Middle of Month. Population. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 28 October 2022. Accessed: 28 October 2022.

U.S. Bureau of Economic Analysis. Table 2.6. Personal Income and Its Disposition, Monthly, Personal Income and Outlays, Not Seasonally Adjusted, Monthly, Middle of Month. Compensation of Employees, Received: Wage and Salary Disbursements. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 28 October 2022. Accessed: 28 October 2022.

U.S. Department of Labor Bureau of Labor Statistics. Consumer Price Index, All Urban Consumers - (CPI-U), U.S. City Average, All Items, 1982-84=100. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 13 October 2022. Accessed: 13 October 2022.

Political Calculations' initial estimate of median household income in August 2022 is $78,075, an decrease of $457 (or 0.58%) from the initial estimate of $78,532 in July 2022.

But that's only because the Bureau of Economic Analysis released its annual revision of its aggregate wage and salary data on 30 September 2022. The revision affects its data going back for several years, with July 2022's data undergoing the biggest change. The data revision reduced our estimate of median household income for July 2022 by $1,000 to $77,532. After that adjustment, we find that median household income in August 2022 rose by $543, or 0.7% from July's revised level.

We'll have more discussion about the revision in the analyst's notes. The latest update to Political Calculations' chart tracking Median Household Income in the 21st Century reflects the results of that revision, showing the nominal (red) and inflation-adjusted (blue) trends for median household income in the United States from January 2000 through August 2022. The inflation-adjusted figures are presented in terms of constant August 2022 U.S. dollars.

After the income data revision, we can confirm the first half of 2022 saw median household income decline in real terms, coinciding with a technical recession for the U.S. economy, in which inflation-adjusted GDP fell during this period as well. Median household income has rebounded in the months since, coinciding with low-to-negative month-to-month changes in the Consumer Price Index.

Analyst's Notes

In its latest data release, the BEA made significant adjustments to its aggregate wage and salary data from January 2017 through July 2022. The effect of the data revision can be divided into two periods. The first period runs from January 2017 through February 2021 and is characterized by very small revisions. Most notably, income data for 2020 was revised upward by as much as 0.2% in some months, though most adjustments were much smaller.

The period from March 2021 through July 2022 is much different. Here, the adjustments were all in one direction: down. The smallest was in March 2021, which rounds to 0.0%, but the revisions progressively grow larger each month until July 2022, which was revised down by 1.3%. This period directly coincides with the inflation unleashed by President Biden's spending programs.

The following chart illustrates the effect of all the data revisions on Political Calculations' estimates of median household income. The dark gray data series represents the estimates "before" the revision, the orange data series represents the "after" revision estimates:

The negative adjustment in median household estimates from March 2021 through July 2022 means that President Biden's inflation has been less affordable for the typical American household than previously indicated since it began.

References

U.S. Bureau of Economic Analysis. Table 2.6. Personal Income and Its Disposition, Monthly, Personal Income and Outlays, Not Seasonally Adjusted, Monthly, Middle of Month. Population. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 30 September 2022. Accessed: 30 September 2022.

U.S. Bureau of Economic Analysis. Table 2.6. Personal Income and Its Disposition, Monthly, Personal Income and Outlays, Not Seasonally Adjusted, Monthly, Middle of Month. Compensation of Employees, Received: Wage and Salary Disbursements. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 30 September 2022. Accessed: 30 September 2022.

U.S. Department of Labor Bureau of Labor Statistics. Consumer Price Index, All Urban Consumers - (CPI-U), U.S. City Average, All Items, 1982-84=100. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 13 September 2022. Accessed: 13 September 2022.