Americans’ incomes to decline in 2020, Census data show

The new data, in an annual assessment of the nation’s financial well-being, provides insight into how households fared during the first year of the pandemic, and Washington debates how to strengthen the economy during the worst public health crisis in a century. How much more to spend.

The median household income in 2020 was $67,500, down 2.9% from the prior year.

In 2019, a year before the pandemic took hold, the country’s median household income was determined by what was an inflation-adjusted record in 1967, when the bureau began using its current method.

The poverty rate was 11.4% in 2020, an increase of 1 percent from 2019 and the first increase after five consecutive years of decline. This means 37.2 million people are in poverty, an increase of 3.3 million from 2019.

The threshold for meeting the definition of poverty varies with the size and makeup of the household. For a typical four-person family, it was $26,200 in 2020.

The official poverty measure does not reflect how much a family pays in taxes, and it also excludes non-cash government aid such as tax credits, housing subsidies and free school lunches. A comprehensive poverty measure for such expenses and income actually fell to 9.1% last year, down 2.6 percentage points from 2019.

The reduction, along with an increase in the official poverty rate, highlighted the role of the government safety net, which was expanded during the pandemic. The two poverty measures have tracked closely for a decade, but last year was the first time the supplementary measure fell below the official measure.

The bureau said that without the first two rounds of stimulus checks issued last year, the comprehensive poverty measure would have risen by about one percentage point rather than falling. Notably, stimulus checks moved 11.7 million people above the poverty threshold if their impact alone is counted. In the same way, expanded unemployment programs did so for 5.5 million people. Refundable tax credits, such as the earned-income tax credit, did so for 5.3 million people. However, the Social Security program remained the largest safety net program, lifting 26.5 million people above the poverty line.

“The increase in poverty would have been even bigger if it had not been provided with enough financial support over the past year,” said Shannon Seery, an economist at Wells Fargo & Co.

After direct federal payments made to families in 2021 and increased unemployment benefits that expire in early September, Ms Ciri said, improving the unemployment picture should help families.

“With a strong demand for labor, a record 10.9 million job openings in July, and an increase in average hourly earnings across industries, the current environment should help drive workers back to the job site,” she said.

The bureau also said that the proportion of Americans without health insurance was 8.6% for all of 2020, essentially unchanged from 2018. According to the survey, about 28 million Americans lacked health insurance.

The road ahead for the US economy looks more uncertain in 2020 than ever before. In recent weeks, mounting evidence has built up lost momentum as Covid-19 cases rise again. Supply-chain challenges and labor shortages for low-wage jobs are also weighing on economic growth.

Rocky Smith Jr., a 41-year-old union worker who cuts metal parts down in size after taking them out of the furnace, said a search is on for his family of four in Muskegon, Michigan. After being fired in April 2020, he said, he was not hired back until July 2021.

Mr. Smith said he is now earning more than $20 an hour at his full-time job. He said that his wife started working during his unemployment and the family gave up on food and other luxuries.

“We rolled with the punches,” said Mr. Smith, a former boxer. “Life hit us, but we made it work.”