Estimated Median Household Income Is Down In 2020

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Posted: Mar 03, 2020 12:58 PM
Estimated Median Household Income Is Down In 2020

Source: AP Photo/Charles Krupa

Political Calculations' estimate of median household income dipped slightly in January 2020, decreasing from December 2019's initial estimate of $66,394 to $66,370.

The following chart shows the nominal (red) and inflation-adjusted (blue) trends for median household income in the United States from January 2000 through January 2020. The inflation-adjusted figures are presented in terms of constant January 2020 U.S. dollars.

For February 2020, the U.S. Bureau of Economic Analysis revised aggregate personal income extending back to July 2019, reducing its previous monthly estimates by anywhere from 0.3% (July 2019) to 0.7% (December 2020). Political Calculations' revised estimate of median household income for December 2019 is $66,187.

Analyst's Notes

Sentier Research has suspended reporting its monthly Current Population Survey-based estimates of median household income. We'll miss their monthly updates, while we continue to provide the estimates from our alternate methodology.

Statistically, over 240 months from January 2000 through December 2019, our estimates have fallen within 0.9% of Sentier Research's estimates in 70% of observations, within 1.8% in 95.8% of observations and within 2.7% in 99.6% of observations. The greatest deviations between our results and Sentier Research's estimates occurred in October 2000, where our estimate was 3.2% higher than Sentier Research's figure, and in February 2010, where our estimate was 3.1% lower than Sentier Research's figure.

References

Sentier Research. Household Income Trends: January 2000 through December 2019. [Excel Spreadsheet with Nominal Median Household Incomes for January 2000 through January 2013 courtesy of Doug Short]. [PDF Document]. Accessed 6 February 2020. [Note: We've converted all data to be in terms of current (nominal) U.S. dollars.]

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 February 2020. Accessed: 13 February 2020.

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 February 2020. Accessed: 28 February 2020.

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 February 2020. Accessed: 28 February 2020.