American workers are feeling the pinch.
The median annual household income in the U.S. was $74,755 in 2022, a 0.8% decline from the previous year after adjusting for inflation, according to the latest data from the Census Bureau.
The decline in income is “disappointing,” said Sharon Parrott, president of the Center on Budget and Policy Priorities, a left-leaning public-policy think tank based in Washington D.C.
“While more people were working and nominal wages rose, high inflation in 2022 eroded those gains for many,” she said.
Although 17 states saw their average household income decline over the past year, five states saw an increase: Alabama, Alaska, Delaware, Florida and Utah.
These 17 states saw a decline in income last year:
- Connecticut
- Illinois
- Indiana
- Iowa
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Missouri
- Nebraska
- New Hampshire
- Ohio
- Oregon
- Pennsylvania
- Vermont
- Virginia
- Wisconsin
Income in other parts of the U.S. remained broadly stable, according to the Census Bureau report, which was released this week. Washington, D.C., had the highest median annual household income in the nation at $101,027, followed by New Jersey at $96,346. Mississippi had the lowest median annual household income at $52,719.
Although the labor market has remained relatively tight over the past year, it’s still a challenging time for many U.S. workers.
Hourly wages rose 4.3% year over year in August. Federal Reserve officials would like to see wage growth slow to prepandemic levels of 3% or less.
And annual inflation was 3.7% in July compared with a year ago, the Bureau of Labor Statistics said this week. Although that was in line with most economists’ expectations, the monthly gain was the biggest increase in 14 months, and the annual rate rose compared with the prior two months. Inflation hit a recent peak of 9.1% in June 2022.
Don’t miss: After a wave of layoffs, tech is hiring for AI jobs
In July, the Federal Reserve raised its benchmark interest rate by a quarter of a percentage point to a 22-year high and signaled it is prepared to raise rates again to temper elevated inflation. That decision increased the Fed’s benchmark interest rate to a range of 5.25% to 5.5%, the highest the Fed target rate has been since 2001.
There were no pandemic-related stimulus payments last year, and the enhanced child tax credits have also expired. Child poverty in the U.S. more than doubled in 2022, and poverty is also rising for Americans 65 and older, according to the Census Bureau’s annual poverty report, which was also released this week.
Read the full article here
