U.S. Inflation-Adjusted Household Income Rises in 2023, But Poverty Rate Also Edges Up: What Does This Mean for Your Finances?
The U.S. Census Bureau reported that real median household income increased to $80,610 in 2023, a 4.0% rise from the previous year. However, a measure of the poverty rate, adjusted for government support, also rose to 12.9% from 12.4% in 2022. The official poverty rate fell to 11.1% from 11.5%.
These figures come as the economy has returned to pre-pandemic growth levels, with job growth booming and inflation easing. The unemployment rate was at 3.4% in January 2023, the lowest level in more than 50 years. Employment growth has been strong, averaging around 250,000 new nonfarm payroll jobs a month in 2023.
However, inflation remains a concern, with the Federal Reserve raising interest rates to over 5% in an effort to curb price increases. Inflation has fallen from a high of 7.1% in June 2022 to 2.5% currently, but it continues to be a key issue for households and policymakers.
As an experienced investment manager and financial market journalist, it's important to analyze these numbers to understand how they can impact your finances. The rise in household income is a positive sign, but the increase in the poverty rate highlights the need for continued support and economic stability. It's crucial to stay informed about economic trends and adjust your financial strategy accordingly to navigate any challenges that may arise.