THE economic recovery since the Great Recession has been subdued by historic standards. Typical families have born the brunt of this sluggish growth, thanks to rising inequality. But there are signs that even if things aren’t getting better for these families, they have stopped getting worse. On September 16th the Census Bureau reported that real (that is inflation-adjusted) median household income rose 0.3% in 2013 from 2012, the first increase since 2007. Poverty also fell for the first time since 2006: 14.5% of families lived below the poverty line, defined as $24,028 for a family of four, down from 15% in 2012.
The gains aren’t much. In fact, the 0.3% increase is statistically insignificant and barely begins to dig the typical family out its post-recession hole. The median income is still 8% lower than in 2007.
The report doesn’t get into why median incomes rose. There two likely causes. One is a decline in inflation thanks to falling energy prices, which helps bolster real incomes. Inflation...Continue reading