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Median Household Income Rose 1.8% in 2017, Census Figures Show -- 2nd Update

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09/12/2018 | 11:05pm CEST

By Janet Adamy and Paul Overberg

U.S. household incomes rose for the third straight year in 2017, according to census figures released Wednesday that suggest more Americans are benefiting from the robust economy.

The new data, which provide a broad look at U.S. economic well being, show that median household income increased to $61,372 last year, up 1.8% when adjusted for inflation. There were 39.7 million people in poverty last year, and that rate dropped 0.4 percentage point to its lowest level since 2006. The percentage of people without health insurance coverage for the entire 2017 calendar year was 8.8%, or 28.5 million, not statistically different from 2016.

The household income level is the highest on record, but a change in the way the figures are calculated over time makes comparisons imperfect, and census officials said the figure isn't statistically different from previous income peaks in 1999 and 2007. The 2017 growth rate also lagged behind the previous two years, when median household income rose 3.2% in 2016 and 5.2% in 2015.

Men saw a 3% increase in median earnings, while women's essentially remained flat. The number of people working full time increased by 2.4 million in 2017.

Incomes rose mostly because more people worked more hours -- and to a lesser extent because their wages increased. "We're continuing to see that shift from part-time, part-year work to year-round, full-time work, " said Trudi Renwick, an economist at the Census Bureau.

Some economists said they remain puzzled that wages haven't risen more quickly, given the overall strength of the economy and an unemployment rate around 4%. While wages are rising a little bit more quickly than earlier in the economic expansion, inflation has also ticked upward, cutting into gains.

"At the kinds of unemployment levels that we have, if all we're seeing is a less than 2% growth in [incomes], that's not what you would expect with the kinds of data that we have today," said Peter Atwater, president of Financial Insyghts, an economic consulting firm in Wilmington, Del.

Republicans hope that recent signs of wage growth will persuade voters to back GOP candidates in November's election. The White House Council of Economic Advisers said Wednesday's figures were a sign that "the effects of the strong economy are reaching Americans throughout the United States."

The council said they understate economic progress because other measures that factor in health insurance, food stamps and housing assistance show an even sharper decrease in poverty. Since 2014, the poverty rate has fallen 2.5 percentage points, from 14.8% to 12.3%.

Democrats say President Trump and Republicans are wrong to claim responsibility for the gains, because meaningful increases in household income and poverty reduction started in 2015. In a speech at the University of Illinois last week, former President Barack Obama said, "When you hear how great the economy's doing right now, let's just remember when this recovery started."

In midterm campaigns, Democrats are emphasizing that the income gains haven't been spread broadly enough. Income inequality remained essentially unchanged in 2017. Households at the 90th percentile of the income distribution made $179,077, while households at the 10th percentile made $14,219. More than half of all income went to the top fifth of households.

Marian Meszaros, a 62-year-old who works at a grocery-store deli in Franklin Square, N.Y., said she got a 93-cent raise last year that lifted her pay to $15 an hour. But because her cost of living is also rising, and she is helping support her mother, she feels like she keeps falling further behind.

"I made more money 20 years ago than I am now," said Ms. Meszaros, who previously worked as a hairdresser. "I would just like to be middle class again."

Although the overall U.S. rate of health insurance coverage held steady last year, the percentage of people lacking coverage fell in 14 states in 2017 -- a first since the Affordable Care Act began expanding coverage in 2014.

Write to Janet Adamy at janet.adamy@wsj.com

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