Median annual household income in March was $53,043, down 0.7 percent in real terms from February 2014, according to Sentier Research.
Household income fluctuation bears directly on the country's retirement landscape. Understanding how current income trends compare to inflation-adjusted past trends helps put in content the extent of the current retirement crisis.
Sentier's research shows two themes, one relative to nearer terms, the other relative to a longer period of comparison. Despite last month's decline from the month before, median household income in March of 2014 was 1.3 percent higher than in March 2013, and 3.0 percent higher than in August 2011 ($51,482), when the low point in household income was hit subsequent to the last recession.
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While this upward trend in household income has been consistent since the low point in August of 2011, the March, 2014 median still significantly lags the median in June 2009 by 4.0 percent. June 2009 was the statistical end of the last recession and the beginning of the economic recovery. Household income in June 2009 was $2,000 greater than it is now.
It gets worse. March's median income was 5.7 percent lower than the median of $56,271 logged in December of 2007, the beginning month of the recession.
March's median income was 6.9 percent lower than the median of $56,950 in January of 2000.
Today's average household makes nearly $4,000 less a year than it did 14 years ago.
Income amounts stated in the report are pre-tax and adjusted for inflation. Data is based on a monthly survey of 50,000 households and 135,000 household members and is subject to sampling errors. Sentier places a 90 percent confidence level on the accuracy of its data.
Analysis from dshort.com on the Sentier research adjusts the nominal income reported in 2000 to real, seasonal-adjusted figures in 2014. Accounting for these adjustments the decline in household income from 2000 is even starker. The $40,917 reported as the nominal income median in 2000 is actually $56,950 in today's inflation-adjusted terms.
The recent data on household median income seems to support the notion that the nation's retirement prospects will be difficult to improve when real incomes stagnates or deflates.
Sentier is an Annapolis, MD based research firm that tracks household income and demographic trends for government organizations, think tanks and media outlets.
reported in March of 2014 incomes going back to 2000.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
