Incomes drop for third year in a row

Family incomes dropped by about $2,000 last year on average, the U.S. Census Bureau estimated on Tuesday. 

Median family income has dropped every year since 2019, adjusted for inflation. The figure stood at $74,580 as of 2022, according to Census data, a 2.3 percent drop from 2021 levels.

The change may reflect rising inflation, which has cooled in recent months but nonetheless hurt families’ bottom lines. Last summer saw inflation hit a forty-year high.

Inflation slowed to 3.2 percent in July, down from over 9 percent a year before.

Unemployment has also remained low, so far escaping fears of a recession as the Federal Reserve continues to raise interest rates.

Those good signs have some economists optimistic that the trend of falling income will slow or stop in the 2023 estimates.

“Shifting into the present and into the future, the prospects are better for wages to make up for some of the ground lost during the last couple of years,” Comerica Bank economist Bill Adams told The Wall Street Journal.

Poverty rose by about 4.6 percent last year, the Census also estimated. It more than doubled among children to about 12 percent as federal programs assisting families expired.