Record Median Income Masks Struggling Families

According to recent data from the Census Bureau, US real median household income reached $87,460 last year, a record high dating back to when the series began in 1967. This figure is 'real,' meaning it's adjusted for inflation, and 'median,' describing the level at which half fall above and half below.

While overall measures show some progress, there are notable caveats that need examination. Median income rose by 3.0% for White households and 4.8% for Black households, with no significant change for Asian or Hispanic households. Full-time working women saw a 3.2% increase, while men's levels were stable.

Poverty data is somewhat encouraging from an overall perspective. In 2025, the official poverty rate fell 0.5 percentage points to 10.2%, with 34.5 million people affected. The official rates for children and Hispanic individuals both reached historic lows.

However, many families are struggling despite better levels in overall measures. The incomes of the highest 10% of households increased, while those of the lowest 10% did not. Moreover, the inflation adjustment relies on averages and aggregate assumptions, which don't capture individual household situations, particularly with costs such as housing, healthcare, and childcare.

Housing affordability is a widespread problem due to higher house prices and mortgage interest rates. Insurance costs have also risen, along with property taxes, maintenance, and repairs. Childcare is another significant issue area, with more than half of parents spending at least 50% of their income on it, according to an assessment by the Federal Reserve.

Healthcare is also a concern, as a significant proportion of the population lacks health insurance, particularly in Texas, which has the highest rate in the US. Even for those with coverage, premiums, deductibles, and other costs are escalating, causing financial strains. A medical issue can dramatically change financial stability, which isn't visible in aggregate numbers.