U.S. Median Household Income Rises, Poverty Rate Falls to 10.2% in 2025
New Census Bureau data shows that real median household income increased by 2.6% in 2025, reaching $87,460, while the official poverty rate dropped to 10.2%. The improvements were attributed partly to a stronger labor market and appear concentrated among families with children and working-age individuals. Treasury Secretary Scott Bessent highlighted these figures during House testimony as part of broader economic discussions. The data was released amid ongoing Federal Reserve deliberations on whether inflation still justifies higher interest rates. Recent CPI data showed 3.4% annual price increases, while mortgage rates climbed above 7%. The Census report does not account for recent developments like the Iran war's impact or post-2025 policy changes. A Republican tax law enacted in summer 2025 is expected to reduce spending on programs such as SNAP by $211 billion through 2035, potentially affecting poverty metrics. The Fed faces a balancing act between curbing inflation and mitigating the economic slowdown from rate hikes.
Topics: Census Bureau Federal Reserve Inflation Median Income Poverty Rate