U.S. Households Experience A Drop in Income
Rising prices and ongoing disruptions due to the pandemic caused a drop in inflation-adjusted median household income in 2022. Surging inflation was a key cause of the decline, as higher prices eroded the purchasing power of households.
The median household income, when adjusted for inflation, dropped to $74,580 in 2022, representing the middle point where half of American households earn more and half earn less. Income in 2022 declined by 2.3 percent compared to the 2021 estimate of $76,330 and marked the third consecutive year where Americans saw their living standards decrease. The 2022 median household income also decreased by 4.7 percent, compared to its peak in 2019, implying that even before the pandemic, household incomes were on the decline when adjusted for inflation.
The number of full-time workers increased between 2021 and 2022 by 3.4 percent, compared to a 1.7 percent increase in the number of total workers, suggesting a continuing shift from working part-time or part-year to full-time work in 2022.
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