New York Times- Binyaming Applebomb- Household incomes for American families rose strongly in 2015, breaking a yearslong pattern of income stagnation. The median household’s income in 2015 was $56,516, an increase of 5.2 percent over the previous year — the largest one-year rise since at least 1967, the Census Bureau reported on Tuesday.
Wowza! We’re on our way now!
The income gains represent an important turning point in the recovery from the 2008 recession, showing that recent economic gains are being distributed more broadly.
“It has been a long slog from the depths of the Great Recession, but things are finally starting to improve for many American households,” said Chris G. Christopher Jr., director of consumer economics at IHS Global Insight.
The economic recovery, however, remains incomplete. The median is still 1.6 percent lower than in 2007, before the recession. It also remains 2.4 percent lower than the peak reached during the boom of the late 1990s…
Still, most economists saw the report as remarkably positive. In an exuberant tweet, Jason Furman, chairman of the White House Council of Economic Advisers, called it “unambiguously the best” such census data “ever.” Household incomes in 2015 were higher than when President Obama entered office, and it is likely that the gains are continuing during his final year in office.
Binny usually covers the Fed, and usually gets said coverage wrong, but this piece probably wins the Pull-it-sir for breathlessness.
Now, here are the facts straight from the horse’s (Census Bureau’s) mouth.
Median household income was $56,516 in 2015, a 5.2 percent increase from the 2014 median in real terms, but 1.6 percent lower than the median in 2007, the year before the most recent recession, and 2.4 percent lower than the median household income peak that occurred in 1999.
So far, so good.
The 2015 real median earnings of men ($51,212) and women ($40,742) who worked full time, year round increased 1.5 percent and 2.7 percent, respectively, between 2014 and 2015.
Oops.
So the 5.2% increase in median household income came from the man of the house earning 1.5% more and the woman of the house earning 2.7% more? That’s some math!
If a couple earned an average of 1.9% more, where did the other 3.3% increase come from?
The report shows the number of men and women working. Could that have been the source of the gain in household income? Nope. The number of men working increased by just 2.3% and the number of women working rose by 1.9%. Obviously some of those formed additional households. So an increase in the number of working persons per household could not account for the 5.2% in median income per household.
Working women did see an increase of 6.4% in their total earnings. But women working full time had income gains of only 2.7%. Apparently many women took a second job to help keep their households afloat. Is needing a second job an improvement in economic well being for those households?
We know that many households have a single wage earner, and that many of those are headed by women. But men earned only 2.3% more. Considering the 6.4% increase for women, even if the ratio of households headed by men and those headed by women were 50/50, that would only mean an average earnings gain per household of 4.3% thanks to women taking second jobs.
The Census Bureau lists 15 sources of household income.
1. Earnings
2. Unemployment compensation
3. Workers’ compensation
4. Social security
5. Supplemental security income
6. Public assistance
7. Veterans’ payments
8. Survivor benefits
9. Disability benefits
10. Pension or retirement income
11. Interest
12. Dividends
13. Rents, royalties, and estates and trusts
14. Educational assistance
15. Alimony
16. Child support
17. Financial assistance from outside of the household
18. Other income
The report doesn’t break out the dollar amount of any source other than earnings. Since earnings did not account for the 5.2% gain in household income, what did? None of these other sources could have been the source. Virtually none of them would have increased by that much, and none of them would apply to more than a fraction of total households. Therefore they would not have had much impact on the median of all households.
Given these facts, the 5.2% increase is “a riddle, wrapped in a mystery, inside an enigma.” Churchill used that phrase to describe politics in the Soviet Union. I think that’s an apt analogy for US government statistics.
Assuming that 5.2% increase wasn’t just a fabrication or a data error, I’m still wondering, where it came from. It’s not earnings and not the increase in the number of men and women working. It’s not the other sources of income. By deduction, there could only be one source of the increase– an increase in household size. For instance, if Junior is making $28,000 a year working as an assistant manager at McDonald’s, and he or she decides that the rent is too damn high, he moves back in with Mom and Dad. Voila, if household income increases by 50% in 6% of households, that would account for the increase not caused by the increase in individual earnings.
Does that mean that households were actually doing better 5.2% better?
No. But the headlines sound good.
Yeah, that’s the ticket.
The post Median Household Income Rose 5.2%! Yeah, That’s The Ticket was originally published at The Wall Street Examiner. Follow the money!
This is a syndicated repost courtesy of Posts By Lee Adler – The Wall Street Examiner. To view original, click here.
Common core math……
So we’re actually doing better that I thought we were.
I suppose that could explain Obama’s widespread popularity and positive approval ratings, you’d expect the opposite if things were going south instead.
Another 7.5 million votes for the harpy!!
Just another lie.
great analysis… I knew the headline was bullshit, but hadn’t put the puzzle pieces together.
Social Security Cost-Of-Living Adjustments
2009 0.0
2010 0.0
2011 3.6
2012 1.7
2013 1.5
2014 1.7
2015 0.0
Since there is no cpi rise, this 5.1 is real income. This extra influx of cash should mean that household debt is being paid off at a rapid rate as prices are not rising it does not need to be spent on current consumption. So you pay down debt .
prusmc
You must be smoking some strong shit.
I like the way prusmc thinks………..
The inflation will just inflate away debt so in the long run we will all pay off our measly little debt with inflated currency and we will be debt free/ worry free.
Stucky don’t sell the house, pretty soon you can just pay for it like it was a cheese sammich.
Or did prusmc actually buy that incomes are up?
Dude, you need to rub a few brain cells together, generate a little heat up there and think. Don’t just drink the koolaid………there might be poison in the cup!
Nation of Liars, every fucking place you look.
CuNNt is still saying Hillcunt collapsed due to the heat. Ya just gotta think about that for a second.
Literally MILLIONS of people live in that area, MILLIONS of people absolutely know that is was a FUCKING PERFECT FALL DAY with a lovely breeze. But, noooooo, you stupid shits, CuNNt knows better!! The in-you-face fuck-you lying should make your head spin.
Also, don’t forget Building 7.
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Didn’t seem to see a lot of other people collapsing from the heat there either, so maybe that means Hillary was in the worst physical condition of them all.
Wow. You see, not only was it hot, according to MSNBC whores … it was TERRIFICALLY HOT!!!!
Protect Hillcunt, at all costs!! Even when MILLIONS of people know it was a perfect day.
I know literally noone who has managed to swing a wage increase over the last 2-3 years. I mean higher than a COLA, 1.5% is not a raise.
We don’t personally know each other but I managed low double digits this year. Still way behind overall but my charmed life trend continues. When it finally ends it’s gonna be ugly!
At least we’re not Venezuelan …. yet.
Dozen eggs? $150.
Priceless.
http://www.zerohedge.com/news/2016-09-14/venezuelas-death-spiral-dozen-eggs-cost-150-hyperinflation-horrors-hit-socialist-uto
all lies, all day every day.
The local newspaper here in Oregon reported yesterday that the poverty rate fell 1.2 percentage points, the steepest decline since 1968! This goes beyond a lie, that is a boatload of BS.
Deconstructing The “Median Income Bullshit”
by Tyler Durden
Sep 15, 2016 11:29 AM
Submitted by Dave Cohen via Decline of the Empire
Deconstructing Median Income Bullshit
When I learned yesterday, 55 days before the 2016 election, that the Census Bureau and the White House had announced an historic leap in real (inflation-adjusted) median household income, my bullshit detector went into the red, went right off the scale and then ceased functioning. I’ll have to get a new one.
DOE
Look at that jump! The biggest since 1967 when record keeping began. How fucking likely is that?
My first clue appeared in the Los Angeles Times.
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The clue is circled. Redesigned income questions?
And while I’m quoting the Los Angeles Times, there is this—
Obama, stumping for Clinton at a campaign event Tuesday in Philadelphia, did not pass up the moment to spotlight the census report. Obama said the uninsured rate was the lowest on record as was the pay gap between men and women.
“So, now, let’s face it; the Republicans don’t like to hear good news right now,” Obama said. “But it’s important just to understand this is a big deal. More Americans are working, more have health insurance, incomes are rising, poverty is falling, and gas is $2 a gallon. … Thanks, Obama!”
Keep those gasoline prices in mind. OK, this time I searched for “redesigned income questions” and found exactly one article at the New York Post. That’s not the New York Times. No, that’s the New York Post. (I added the links.)
Economic data that come out of Census, including the monthly unemployment report, should be scrutinized more carefully than they are — because they are what hurt Americans the most day to day, ruin dreams of hardworking families and, when the numbers are played with to present a better picture, erode trust in government.
Here are some details on just two points.
First, the 5.2 percent increase came during 2015 compared with the previous year. The Census Bureau doesn’t have up-to-date numbers.
But an outfit called Sentier Research, manned by ex-Census workers, does.
And while Sentier’s numbers confirm the increase in 2015, household income this year has slackened off, they told me Tuesday.
We’ll look at the Sentier data below.
Gordon Green, a partner in Sentier, says median household income declined slightly in the first half of 2016. In both 2015 and the first half of 2016, incomes were boosted by a drop in gasoline prices.
“Oil prices play into this in a very, very big way,” Green said.
Follow the link to see the swan dive in gasoline prices which began in 2014 and continued into and throughout 2015. Use the 5-year chart. You’ll see an insignificant seasonal rise in the summer months in 2015.
The second knock is that Census moved the goal posts.
Ah, make the data look better by doing the measurement differently. The usual move.
Starting in 2013 with a partial phase-in, which was fully implemented in 2014, Census changed the questions and the methods in calculating household income.
For example, Census, starting in 2014, began to “collect the value of assets that generate income if the respondent is unsure of the income generated.”
Also, the government started to use “income ranges” as a follow-up for “don’t know” or “refused” answers on income-amount questions.
Those are the redesigned income questions.
There are plenty of other changes — but with just these two, income levels reported could be noticeably higher, say 5.2 percent higher, without the actual income being 5.2 percent higher.
In the fine print, Census admits the change. “The data for 2013 and beyond reflect the implementation of the redesigned income questions.”
Americans, in their guts, know the 5.2 percent gain in median household incomes isn’t true.
OK, now it was time to check out the Sentier data, which is updated monthly by ex-census employees. Doug Short is the go-to guy for this kind of thing, and I found this July, 2016 update.
Sentier Research, an organization that focuses on income and demographics, offers a more up-to-date glimpse of household incomes by accessing the Census Bureau data and publishing monthly updates. Sentier Research has now released its most recent update, data through November (available here). The numbers in their report differ from the Census Bureau’s in three key respects:
1. It is a monthly rather than annual series, which gives a more granular view of trends.
2. Their numbers are more current. The Census Bureau’s most recent is the 2014 annual data released in September 2015.
3. Sentier Research uses the more familiar Consumer Price Index (CPI) for the inflation adjustment. The Census Bureau uses the little-known CPI-U-RS (RS stands for “research series”) as the deflator for their annual data. For more on that topic, see this commentary.
I highly recommend that you read the commentary that last link goes to. It’s called Median Household Income Growth: Deflating the American Dream. The choice of the inflation-adjustment deflator makes all the difference in these median household income calculations. I will comment on that at the end.
Here’s the first chart.
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Sentier data deflated with the CPI (see above) shows a jump in real median household income in 2015 which Sentier says was due in large part to low gasoline prices. Median household income is still down from its early 2008 peak.
Here’s the second chart, with some commentary from Doug Short. Remember, this is the latest data available on real median household income (July, 2016).
The next chart is our preferred way to show the nominal and real household income — the percent change over time. Essentially we have taken the monthly series for both the nominal and real household incomes and divided them by their respective values at the beginning of 2000. The advantage to this approach is that it clearly quantifies the changes in both series and avoids a common distraction of using dollar amounts (“How does my household stack up?”).
The reality illustrated here is that the real median household income series spent most of the first nine years of the 21st century struggling slightly below its purchasing power at the turn of the century.
Real incomes (the blue line) hit an interim peak at a fractional 0.7% in early 2008, far below the nominal illusionary interim peak (as in money illusion) of 27.2% six months later and the latest at 40.3%, fractionally off the 40.4% record high in January of this year. The real median household income is now at -1.1% from its turn-of-the-century level. In essence, the real recovery from the trough has been frustratingly slow.
DOE
Summing up, real median household income (blue line just above) adjusted with the CPI is down 1.1% with respect to where it was in the year 2000. And if you follow that “Deflating The American Dream” link above, you will find out that deflating with the CPI-U-RS as the Census Bureau does puts a rosier glow on the historical data than deflating with the CPI does.
So it’s all bullshit, isn’t it?
And if you do this Google search, you will see all the usual suspects celebrating this nonsense. It’s all over NPR this morning. Those assholes can’t get enough of this happy bullshit.
I knew it was bullshit the moment I saw it, but thought it worth the time to figure out what was going on. And now we know.
Yet another reason to self identify on the census and make up a life that appeals to you in your responses. Make the census as meaningless to them as it is to us! There’s so much to hate about this bloated govt and so little time!
Wouldn’t all this happy horseshit make more sense if we used actual income reported to the IRS every year rather than answers to Census survey questions? It seems the data is already in the government data base, and nothing would need to be adjusted. Does that sound too easy and make too much sense or too logical or am I just an idiot?
“Your beancounters have to count the right beans.” Me, to various bosses over the years. They always appreciated my input.
The Bureau of Lies & Statistics (BLS). A branch of the Federal Government that uses obfuscation, manipulation, data point outliers, and manipulative coaxing to convince Joe Shmoe that he’s making more than ever, the economy is roaring ahead, and the banks are safe repositories for wealth with little to no risk. If you believe that, I’ve got some snake oil to sell you, the cure all for all your ailments. Ethics. The fundamental attribute that defines all great societies. The erosion of truth is the erosion of trust. When factual data is warped to such a high degree that it distorts the reality of what the data is supposed to personify, the end result is meaningless. The lie is baked into the misrepresentation of the aggregated data. This will continue until we are all living in straw huts and the government is telling us that we are all wealthy with average wage increases of 20000% and household income increases of 60000%. Zimbabwe here we come!
Meanwhile, in flyover Wisconsin….
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Are you going to believe the government or your lying eyes?