US inflation-adjusted income rose in ’23 but poverty rate up – data

The US Census Bureau released on Monday data showing that inflation-adjusted household income increased in 2023, while the poverty rate rose slightly.

This gives a snapshot of how American households fared as the economy returned to pre-coronavirus pandemic growth levels, job growth flourished, and inflation eased.

Real median household income rose 4 per cent to $80,610 in 2023. However, the official poverty rate increased to 12.9 per cent from 12.4 per cent in 2022.

The data comes ahead of the US presidential election. The impact of inflation following the outbreak of the pandemic in early 2020, and how much that has squeezed pocketbooks of voters once government support programmes designed to shore up household incomes expired, remains a key issue.

The economy continued to grow strongly in 2023, returning to pre-pandemic levels. The unemployment rate reached a 50-year low of 3.4 per cent in January 2023 and remained at 3.7 per cent by December.

Employment growth averaged 250,000 new jobs per month in 2023, surpassing the pre-pandemic average.

Inflation, by the central bank’s preferred measure, remained a significant concern, peaking at 7.1 per cent on an annual basis in June 2022, to 5.5 per cent at the beginning of 2023, before more than halving to 2.6 per cent by last December. The US Federal Reserve raised interest rates to combat inflation, which has since declined to 2.5 per cent.

Attribution: Reuters & The US Census Bureau