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Rise in Real Household Income - 9/15/16

Census Bureau estimates of household income in twenty fourteen indicate that the typical American family earned a bit less than fifty three thousand seven hundred dollars that year.  When adjusted for inflation, that figure is about thirty seven hundred dollars less than it was in two thousand and seven and more than four thousand dollars less than in two thousand. 

This means that the typical American family is meaningfully less prosperous than it was a decade and a half ago.  But last year may have been better.  As reported by the New York Times, Sentier Research, a firm formed by two former Census Bureau employees, estimates that real median household income expanded three point eight percent last year. 

That would represent the largest annual gain in household income since the firm began producing its data series in two thousand.  It’s not that Americans received large raises last year.  Some people did, many didn’t. 

No, the expansion in real household income has much to do with low inflation.  Inflation was extraordinarily low last year, growing a meager tenth of a percent, largely because of very low energy prices.    

Anirban Basu, Chariman Chief Executive Officer of Sage Policy Group (SPG), is one of the Mid-Atlantic region's leading economic consultants. Prior to founding SPG he was Chairman and CEO of Optimal Solutions Group, a company he co-founded and which continues to operate. Anirban has also served as Director of Applied Economics and Senior Economist for RESI, where he used his extensive knowledge of the Mid-Atlantic region to support numerous clients in their strategic decision-making processes. Clients have included the Maryland Department of Transportation, St. Paul Companies, Baltimore Symphony Orchestra Players Committee and the Martin O'Malley mayoral campaign.