Today the Census Bureau released data on income and poverty in American for the year 2015.
Income and Poverty in the United States: 2015
A quick snap shot of the data shows all the numbers moving in the right direction.
U.S. real median income gained 5.2% in 2015. The only time we had a bigger jump in real median income was back in 1975 when the data showed a gain of 7.1%. This is the 2nd biggest jump in real median income since 1967.
The Census Bureau’s Gini index is an income based approach to measuring inequality and therefore does not include credit availability, or accumulated family wealth. It provides a measures the distribution of incomes on a scale of zero (everyone has the same income) to one (one person has all the income). Despite its limitation, the Gini Index shows that inequality has fallen for 2 years now in the U.S.
One of the most frequently told lies by the anti-American bears has been that everyone in the US is working part time jobs. In truth, full time employment hit an all time high in 2015.
The newly released data also shows that poverty is falling in the U.S.
Highest percentage growth in incomes, came from the lower end. ( Positive)
Not in the Census report but related to this, the Employment Cost Index, (ECI) a measure of inflation of wages, and employer-paid benefits, is running at 3.4% with 4.2% wage inflation for job switchers. More up to date data had been showing these wage gains. The census data tends to lag behind current data trends.
Even with these gains, we will need to see more inflation before the Federal Reserve will consider a rate hikes.
If core inflation gets to 2.5% and total ECI wage inflation gets to 4%, then I would be more inclined to believe the Fed will raise rates. For now, we are seeing a lot jaw boning by some Fed members, but no action.
Logan Mohtashami is a senior loan officer at AMC Lending Group, which has been providing mortgage services for California residents since 1987. Logan also tracks all economic data daily on his own facebook page https://www.facebook.com/Logan.Mohtashami