U.S. households experienced a record increase in income last year, according to a better-than-expected Census Bureau report that indicated the recovery from the Great Recession has gained traction.
Median household income rose to $56,500 in 2015 last year, up 5.2%, or $2,800, from 2014, while the poverty rate fell to 13.5% from 14.8% the year earlier, the largest single-year percentage drop since 1968.
“American families still have some distance to go to make up for many years of stagnating earnings and rising poverty, but the strong and broad-based improvement indicates that the recovery from the Great Recession has taken hold and that American households may have more cause for optimism than is generally perceived,” the Los Angeles Times said.
The rise in income reflected healthy job growth, coupled with moderate wage gains. Households at the bottom 10% of the economic ladder benefited most, with income increasing 7.8% increase last year, while the top 10% in income posted a 2.9% gain.
Median household income was still 1.6% lower than in 2007, adjusting for inflation, and remained 2.4% lower than the peak reached during the boom of the late 1990s.
“It has been a long slog from the depths of the Great Recession, but things are finally starting to improve for many American households,” Chris G. Christopher Jr., director of consumer economics at IHS Global Insight, told The New York Times.
President Barack Obama hailed the report, which could boost the campaign of Democratic presidential nominee Hillary Clinton. “This is a big deal,” he said Tuesday at a Clinton campaign event. “More Americans are working, more have health insurance, incomes are rising, poverty is falling, and gas is $2 a gallon.”
The Census Bureau figures confirmed, however, that much of the economic growth in 2015 was concentrated in large cities, not the rural areas where Republican nominee Donald Trump derives most of his support.
“Today’s report is another disappointing confirmation that too many Americans are still struggling to provide for their families and reach their full potential,” said Rep. Kevin Brady (R-Texas), the chairman of the House Ways and Means Committee