Median US income rises to highest on record even as Americans feel affordability pinch

Median US Income Rises to Highest as Costs Keep Pinching

Activelifezero.com – Median US income rises to highest on record in 2025, reaching $87,460 after inflation, according to new Census Bureau data. The 2.6% increase came during the first year of President Donald Trump’s second term, but many households continued to feel squeezed by high costs for groceries, rent, utilities and transportation.

The figure is the highest median household income recorded since the Census Bureau began tracking it in 1967. Still, a stronger national income measure does not necessarily mean that day-to-day affordability has improved for every family.

Poverty Rate and Child Poverty Both Fell

The overall poverty rate declined by 0.5 percentage points to 10.2% in 2025. Child poverty fell by a full percentage point to 13.4%, its lowest recorded level.

Health insurance coverage remained broadly stable, with the uninsured rate near 7.9%. Medicare coverage rose 0.6 percentage points to 20.1%, increasing enrollment to 59.2 million people from 57.8 million a year earlier as the population continued to age.

Medicaid coverage declined 0.5 percentage points to 17.1%, marking a second consecutive annual drop. The Census Bureau linked much of the change to the end of the pandemic-era policy that had limited states’ ability to remove people who no longer qualified for coverage.

Why Higher Income May Not Feel Like Relief

Median US income rises to highest because the household measure includes more than wages. It counts earnings from part-time or part-year work as well as Social Security, pensions and unemployment compensation. Median earnings for full-time, year-round workers, by contrast, showed no statistically significant change in 2025.

Women’s median earnings in full-time, year-round jobs increased 3.2%. Women earned 83.9% of comparable male workers’ earnings, up from 80.6% a year earlier and the first statistically meaningful annual increase in that ratio since 2016.

Income growth was uneven. Every household group saw an increase except households in the bottom 10%, whose income did not show a change. Those families can be especially vulnerable when housing, food, energy and other essential costs rise.

The Census income measure does not include stock-market capital gains. The S&P 500 rose 16.39% in 2025, meaning households with investments may have experienced additional wealth gains that are not reflected in the median income data.

Safety-Net Changes Could Affect Future Data

The annual report does not include the later effects of cuts to Medicaid and food stamps in the Republican-backed “One Big, Beautiful Bill,” signed by Trump in July 2025. The effects of those changes may become clearer in future poverty and health coverage reports.

“These cuts are already taking food assistance and health care away from millions of people who need it, driving up poverty and hardship,” Sharon Parrott, president of the Center on Budget and Policy Priorities, said in a statement.

Parrott pointed to the Supplemental Poverty Measure, which accounts for certain public benefits and household expenses. Under that measure, food stamps helped move more than 3 million people out of poverty last year.

FAQ: What the New US Income Data Means

What does median household income mean?

Median household income is the midpoint of all household incomes: half of households earn more and half earn less. It includes wages and certain other income sources, such as retirement benefits and unemployment compensation.

Why can income rise while affordability remains difficult?

Median US income rises to highest in the data, but costs are not experienced equally. Families facing higher rent, food, energy or transportation bills may still feel financial pressure, especially if their income did not rise or they have little room in their budget.

What should US households watch next?

Future Census reports will show whether poverty, health coverage and household income continue to improve, particularly as changes to Medicaid and food assistance take effect.