According to the Census Bureau, real median household income rose by 2.6% to $87,460 in 2025, while the poverty rate fell to 10.2%, down nearly half a point. Treasury Secretary Scott Bessent highlighted these figures during a House committee testimony, framing them as 'inconvenient facts' for political opponents of the Trump administration.
The data suggests that improvements in the labor market contributed to the rise in household income, particularly benefiting families with children and working-age adults. However, a measure of poverty that includes social safety net benefits remained unchanged, which could face challenges due to the Republican tax and policy law enacted in summer 2025.
This law, known as the 'Big, Beautiful Bill,' is projected to reduce federal spending on food assistance programs significantly. As the Federal Reserve prepares to announce its interest rate decision, new Chairman Kevin Warsh has expressed concerns about inflation, which could lead to higher borrowing costs and slower economic growth.
The Fed's decision will weigh the potential impact of rising rates against the ongoing inflation pressures that disproportionately affect lower-income earners