WASHINGTON (AP) — The inflation-adjusted median income of U.S. households rebounded last year to roughly its 2019 level, overcoming the biggest price spike in four decades to restore most Americans' purchasing power.
The proportion of Americans living in poverty also fell slightly last year, to 11.1%, from 11.5% in 2022. But the ratio of women's median earnings to men's widened for the first time in more than two decades as men's income rose more than women's in 2023.
The latest data came Tuesday in an annual report from the Census Bureau, which said the median household income, adjusted for inflation, rose 4% to $80,610 in 2023, up from $77,450 in 2022. It was the first increase since 2019, and is essentially unchanged from that year's figure of $81,210, officials said. (The median income figure is the point at which half the population is above and half below and is less distorted by extreme incomes than the average.)
“We are back to that pre-COVID peak that we experienced,” said Liana Fox, assistant division chief in the Social, Economic and Housing Statistics Division at the Census Bureau.
The figures could become a talking point in the presidential campaign if Vice President Kamala Harris were to point to them as evidence that Americans' financial health has largely recovered after inflation peaked at 9.1% in 2022. On Wednesday, economists predict that the government will report that inflation fell from 2.9% in July to 2.6% in August. The Federal Reserve, whose target level for inflation is 2%, is poised to start cutting interest rates next week.
Former President Donald Trump might counter that household income grew much faster in his first three years in office than in the first three years of the Biden-Harris administration, though income fell during his administration after the pandemic struck in 2020.
The data showed that while the typical American household regained its 2019 purchasing power in 2023, it essentially experienced no rise in living standards over that time. That is a sharp difference from the preceding four years, when inflation-adjusted median incomes rose 14% from 2015 through 2019.
The data is based on pre-tax incomes, including Social Security and other benefit programs, though it excludes noncash benefits such as food stamps and Medicaid.
The jump in incomes reflects solid job creation last year, which helped reduce the unemployment rate to a half-century low of 3.4% in April 2023. The proportion of Americans in the so-called prime age group of 25-to-54-year-olds with jobs averaged 80.7% last year, the highest level in 23 years. Economists often focus on prime-age workers because they exclude younger people, who are often still in school, and older workers, who are more likely to retire or reduce their hours.
By racial groups, median household income rose 5.4% for whites to $84,630, increased 2.8% for Black Americans to $56,490 and was unchanged for Hispanics at $65,540. Asian incomes were also largely unchanged at $112,800.
While the overall poverty rate declined from 2022 to 2023, under an alternative measure of income the proportion of children in poverty rose from 12.4% to 13.7%. The bump in child poverty comes two years after it had plunged to just 5.2%, when the pandemic-era expansion of the child tax credit provided enhanced benefits to families. But the credit expired in 2022.
“If you want to reduce poverty in the short run, you transfer income to poor families," said Steven Durlauf, an economist at the University of Chicago.
Census also calculated that 92% of Americans had health care in 2023, largely unchanged from the previous year, though the proportion of uninsured children ticked up a half-point to 5.8%.
FILE - People gather near an electronic display of an American flag in Times Square in New York on Aug. 9, 2024. (AP Photo/Pamela Smith, File)
BRUSSELS (AP) — European Union chief Ursula von der Leyen put women in many of the top roles on her new team for her next five-year tenure at the head of the bloc on Tuesday, despite the reluctance of many EU member states to give in to her demand for gender parity.
Von der Leyen put only two men in her top echelon with four women as vice presidents, including Kaja Kallas as foreign policy chief. Kallas was already agreed on by government leaders.
Von der Leyen on Tuesday added Spanish Socialist Teresa Ribera to lead the green transition, along with Ribera also becoming the competition czar. Finland's Henna Virkkunen was her pick for rule of law and digital leader, and Roxana Minzatu of Romania for social affairs leader.
The appointments of the Commission team — which veers to the right after the June elections saw a surge of far-right parties — still have to be confirmed.
The appointment as executive vice president of Raffaele Fitto of Italian Prime Minister Giorgia Meloni's hard right Brothers of Italy party is bound to cause controversy during the parliamentary confirmation hearing in the coming weeks.
Also on Tuesday, von der Leyen gave French Foreign Minister Stephane Sejourne the industrial portfolio, after French heavyweight Thierry Breton resigned and openly criticized the EU chief for allegedly “questionable governance” on Monday,
It left France with a strong voice in the Commission, and many saw Breton's shock resignation more as a removal by von der Leyen of one of her most open internal critics after exerting pressure on French authorities.
Compounding such problems was the defiance of many of the 27 member states as von der Leyen struggled to get anywhere close to gender parity on her Commission team — they staunchly refused to give her a choice between a male and a female candidate.
She said that originally, EU nations only proposed 22% female candidates before she started to push for more.
“So I worked with the member states and we were able to improve the balance to 40% women and 60% men. And it shows that — as much as we have achieved — there is still so much more work to do,” von der Leyen said.
If she could not get full gender parity in numbers, von der Leyen made sure they were more than well represented in the top jobs.
After days of secret talks with individual European governments about their picks, von der Leyen huddled with the leaders of the political groups at the European Parliament in Strasbourg, France, to discuss the makeup of her college before making the final announcement.
Now attention will center on the hearings in the European Parliament, where each candidate can be rejected to force a member state to put another candidate forward.
All eyes are expected to be on Fitto.
Greens lawmaker Rasmus Andresen said the appointment of Fitto, a representative of a far-right party, to the post of executive vice president of the Commission is “completely incomprehensible.”
“Can an anti-European manage EU funds,” Andresen asked.
However, von der Leyen said the Commission team had to reflect Italy's weight as a founding member and major economy.
"The importance of Italy is reflected in the portfolio and the executive vice president. And I think the balance is also very well kept,” von der Leyen said.
Even if the Commission's makeup has hardly become the talk of bar rooms or barber shops across the vast EU of 450 million people, it has enthralled the upper echelons of politics and bureaucracy, as they sought to boost one candidate or undermine another.
The Commission proposes legislation for the EU’s 27 member countries and ensures that the rules governing the world’s biggest trading bloc are respected. It’s made up of a College of Commissioners with a range of portfolios similar to those of government ministers, including agriculture, economic, competition, security and migration policy.
The Commission is to start work on Nov. 1, but speculation is rife that it might not get down to business before January.
European Commission President Ursula von der Leyen presents her new team for her next five-year tenure at the head of the bloc, during a press conference at the European Parliament, Tuesday, Sept. 17, 2024, in Strasbourg. (AP Photo/Jean-Francois Badias)
European Commission President Ursula von der Leyen presents her new team for her next five-year tenure at the head of the bloc, during a press conference at the European Parliament, Tuesday, Sept. 17, 2024, in Strasbourg. (AP Photo/Jean-Francois Badias)
European Commission President Ursula von der Leyen presents her new team for the next five-year, during a press conference at the European Parliament, Tuesday, Sept. 17, 2024, in Strasbourg. (AP Photo/Jean-Francois Badias)
European Commission President Ursula von der Leyen arrives for a session at the European Parliament, Tuesday, Sept. 17, 2024 in Strasbourg. (AP Photo/Jean-Francois Badias)
European Commission President Ursula von der Leyen presents her new team for her next five-year tenure at the head of the bloc, during a press conference at the European Parliament, Tuesday, Sept. 17, 2024, in Strasbourg.(AP Photo/Jean-Francois Badias)
European Parliament President Roberta Metsola, left, and European Commission President Ursula von der Leyen, right, talk prior to the start of a session at the European Parliament, Tuesday, Sept. 17, 2024 in Strasbourg. (AP Photo/Jean-Francois Badias)
FILE - European Commission President Ursula von der Leyen, second right, speaks with from left, European Commissioner for Justice Didier Reynders, European Commissioner for Internal Market Thierry Breton and European Commissioner for Neighborhood and Enlargement Oliver Varhelyi during a meeting of the College of Commissioners at EU headquarters in Brussels, on June 17, 2022. (AP Photo/Geert Vanden Wijngaert, File)
