Census Bureau: Americans Got a Raise Last Year for First Time Since 2007
People walk outside of the New York Stock Exchange (NYSE) on Aug. 26, 2016 in New York City. Stocks fell on Friday after news that the U.S. economy grew at the sluggish rate of 1.1 percent. Despite the slowing growth rate Fed Chair Janet Yellen voiced optimism about the economy at the central bank's annual Jackson Hole summit.Spencer Platt / Getty Images, file
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WASHINGTON — Americans finally got a raise last year after eight years of stagnating incomes.
The typical U.S. household's income rose 5.2 percent in 2015 to $56,516, the Census Bureau said Tuesday. Even with the solid gain, that remains below the median household income of $57,423 in 2007, when the Great Recession began. The median is the point where half of households fall below and half are above.
The government's annual report on incomes and poverty portrays an economy that is finally starting to benefit a wider range of Americans, roughly six years after the recovery began. Middle-class incomes had seen little improvement since the recession ended in 2009, even as the unemployment rate fell and hiring picked up.
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"It's really a broad, broad increase in median incomes, and one of the largest increases... that we've ever had," said Trudi Renwick, assistant division chief at Census.
Median incomes picked up in all regions of the United States, across all age groups, and for most ethnic and racial groups, she said.
Even so, median household income remains 2.4 percent below the peak it reached in 1999, when it was $57,909.
The proportion of Americans in poverty also fell sharply last year, to 13.5 percent from nearly 14.8 percent. That is the largest decline in poverty since 1999. There were 43.1 million people in poverty last year, 3.5 million fewer than in 2014.
The income gains and drop in poverty reflect ongoing gains in the job market, Renwick said. About 2.4 million more Americans found full-time, year-round jobs in 2015.
Americans are also likely benefiting from an increase in middle-income jobs. Many of the jobs created in the early years of the recovery have been in low-paying sectors, such as fast food restaurants and retail.
But according to a report from the Federal Reserve Bank of New York, in 2014 and 2015 the growth of middle-income jobs in sectors such as shipping and construction outpaced the gains in lower-paying and higher-paying work.