The median American income grew faster in 2015 than at any point on record, according to a report released Tuesday by the Census Bureau.
White House officials were ecstatic with the news, with Jason Furman, the Chairman of President Obama’s Council of Economic Advisors, saying on Twitter Tuesday morning that “I usually try to be restrained, but this is unambiguously the best Income Poverty and Health Insurance Report ever.”
Besides the good news on income, the report also showed that the number of Americans in poverty fell by 3.5 million last year. The number of uninsured Americans also fell. More importantly, and striking, given the 99% vs. 1% rhetoric, the report clearly showed that incomes rose for every income segment in the country.
The news runs counter to the widely held belief that the average American is seeing his economic fortunes decline. This perception is posited, for instance, as a cause for the rise of Donald Trump, who, as a political outsider, represents the repudiation of a Washington insiders who, the line of thinking goes, sowed the seeds of the American middle class decline.
This report doesn’t completely puncture that narrative. Median incomes are still lower today than in 2007. Furthermore, middle class Americans have struggled to see their standard of living rise over the past generation, as the increased integration of the global economy has grown the incomes of the very rich and very poor around the world, but done much less for those in the middle classes.
Meanwhile, during that same period, the costs of the most important things in the economy, like healthcare and education, though not recently gas, have risen faster than overall inflation and middle-class incomes, making people feel poorer over time.
But the report is a vindication of the economic policies of the Obama Administration overall, and the Federal Reserve in particular. The central bank has kept monetary policy extraordinarily accommodative, ignoring calls to raise interest rates in order to head off an rise in inflation that has not yet manifested itself in the data. The result has been a steady decline in the unemployment rate, which has caused higher demand for workers and higher worker pay.
Whether or not these statistics filter their way into Americans perception of the economy is a different question, however. According to a survey by Gallup, more Americans think the economy is getting worse than they did at the beginning of 2015, suggesting that a year of wage gains isn’t improving Americans attitudes toward the economy. At the same time, consumer confidence levels are roughly in line with their pre-recession levels, suggesting that while Americans are satisfied with their own economic situations, they believe others’ situations are deteriorating.
