The average U. S. household registered an increase in income of$ 87, 460 in a report released on Tuesday by the Office of Census of the Department of Commerce. However, this figure only represents a slight increase of 2. 5 % compared to 2019, prior to the COVID-19 pandemic and the onset of inflation, when an average income of$ 85, 320 was observed.
Although the current income is the highest in the United States, salary adjustments have been sparse over the past six years due to a high cost of living, which means that households are forced to pay higher prices for necessary goods and services, have a large credit card debt, and lack of savings.
Additionally, the study reveals that during the past year, children's income increased by 3. 2 %, which is an increase of 84 percent per dollar earned by gentlemen, which indicates that the gender pay gap has slightly narrowed in size by 2025.
The wage increase was 1. 7 % for the highest earners, while the lowest wage was 10 % for the poor. Official data indicate a 0. 5 % to 10 % drop in official poverty.
Given current cuts and restrictions on social security programs, meal coupons, and Medicaid, experts caution that new public policies that the Donald Trump administration has put in place may have an impact on this year's and next month's poverty data.
Amanda Nothaft, director of data and analysis at Poverty Solutions at the University of Michigan, said: “Poverty figures seem quite good, especially child poverty, but these figures do not reflect cuts in benefits that began to take effect in early 2026,” she said.
In this new report, associate professor of social work and public policy at the University of Michigan, Kristin Seefeldt, wrote," It is amazing that the average salary of those who earn the most is increasing while that of those who earn the least is stagnant. We see that those who benefit the most from the income code's revisions are those who are most likely to see the lowest marginal tax prices, he said.
A Bank of America report earlier this year revealed that the U. S. economy was operating in a strong" K"-shaped pattern, with the highest income earners ( on the top of the K ) and lower income earners ( on the bottom of the K ) being the main drivers. This pattern is very prevalent in markets that have experienced crises, demonstrating inequality between one social course and another, according to economists.
The bank recently released a new study, which notes that the pay gap was narrowed in the middle of this year, when those who changed jobs noticed a slight increase in salaries, with the resultant analysis indicating that there had been a rise in low-income employees ' salaries.
The past" K"-shaped connection between pay growth after higher and lower-income income has been reversed, according to David Michael Tinsley, a senior economist at the Bank of America Institute.
