The latest update to the chart tracking Median Household Income in the 21st Century shows the nominal (red) and inflation-adjusted (blue) trends for median household income in the United States from January 2000 through November 2020. The inflation-adjusted figures are presented in terms of constant November 2020 U.S. dollars.
The chart shows a continued upward trajectory for median household income in both nominal and inflation-adjusted terms, point to the ongoing recovery from the bottom of the coronavirus recession. However, the arrival of significant COVID-19 infections in California led that state's governor to impose new restrictions on businesses and to order residents to stay at home throughout much of the state in December 2020, which will have negative economic consequences. With one out of eight Americans residing in the state, we anticipate the new lockdowns may affect the national estimate for median household income. Data for December 2020 will become available at the end of January 2021 and will be subject to revision for several months afterward.
Speaking of which, the BEA issued minor revisions for the received aggregate wage and salary dispersement data we utilize in generating our estimates of median household income for the months of July through October 2020. The effect of the adjustments was to very slightly increase the BEA's estimates of wage and salary income earned in the U.S. in these months. Using the revised data, we would now estimate median household income in October 2020 to be $66,077, which is just $11 higher than our original estimate.
Other Analyst's Notes
Sentier Research suspended reporting its monthly Current Population Survey-based estimates of median household income, concluding their series with data for December 2019 before ceasing to operate in early 2020, as its principals have permanently retired. In their absence, we are providing the estimates from our alternate methodology for estimating median household income on a monthly basis. Our data sources are presented in the following section.
In other news, we're developing a new economic indicator based on the average income earned by Americans, which we expect to introduce later this year.
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: 12 November 2020. Accessed: 12 November 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: 25 November 2020. Accessed: 25 November 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: 25 November 2020. Accessed: 25 November 2020.