Summary: The Sentier Research monthly median household income data series is now available for May. The nominal median household income was up $426 month-over-month but up only $1,777 year-over-year. Adjusted for inflation, it was up $240 MoM and only $674 YoY. The real numbers equate to a 0.45% MoM increase and a 1.28% YoY increase. While the monthly rise is welcome news, it merely offsets the previous month’s 0.42% decline.
In real dollar terms, the median annual income is 7.2% lower (about $4,159) than its interim high in January 2008.
The traditional source of household income data is the Census Bureau, which publishes annual household income data in mid-September for the previous year.
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 May (available here). The numbers in their report differ from the Census Bureau’s in three key respects:
- It is a monthly rather than annual series, which gives a more granular view of trends.
- Their numbers are more current. The Census Bureau’s 2012 data will remain its latest until September 2014.
- 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.
The first chart below is an overlay of the nominal values and real monthly values chained in May 2014 dollars. The red line illustrates the history of nominal median household, and the blue line shows the real (inflation-adjusted value). I’ve added callouts to show specific nominal and real monthly values for January 2000 start date and the peak and post-peak troughs.
