American Consumers Newsletter
by Cheryl Russell, Editorial Director, New Strategist Press
3.2% Increase in Median Household Income
IN THIS ISSUE:
1. Hot Trends:
To see Cheryl Russell’s Demo Memo blog, click here.
1. Hot Trends
Median household income registered another gain in 2016, according to the Census Bureau. The $59,039 median household income of 2016 was 3.2 percent higher than the $57,230 median of 2015, after adjusting for inflation. This is the second year in a row of statistically significant gains in median household income since the Great Recession. Income growth was especially large for younger adults. Here are the 2015-16 changes in median household income by age of householder…
Median household income climbed 3.2 percent in 2016 to $59,039, according to the Census Bureau. This median appears to be a record high, surpassing the long-standing 1999 median of $58,665 (in 2016 dollars). But the two medians are not comparable because of a redesign of the Current Population Survey’s income questions in 2014. The new income questions capture much more income from IRA and 401(k) withdrawals, which resulted in a methodological boost to median household income.
So how does the $59,039 median of 2016 compare with the 1999 all-time high after accounting for changes in methodology? We still haven’t caught up, according to the Economic Policy Institute, which for comparative purposes adjusted the medians prior to 2013 for changes in CPS methodology. Here are the results of the Institute’s analysis…
Median household income (in 2016 dollars)
2007: $59,993 (adjusted)
1999: $60,506 (adjusted)
With the 1999 and 2007 medians adjusted to reflect new CPS methodology, the 2016 median is 1.6 percent below the 2007 median, when the Great Recession began. The 2016 median is 2.4 percent below the 1999 median, still the all-time high.
Average annual household growth in 2017 retreated to the sluggish pace recorded in the aftermath of the Great Recession, according to a Demo Memo analysis of the Census Bureau’s Current Population Survey. The estimated 126.2 million households of 2017 are just 0.3 percent more than the number in 2016–a lowly rate growth last seen in 2009 and 2010.
Number of households (and % increase from previous year)
2017: 126,224,000 (0.3%)
2016: 125,819,000 (1.0%)
2015: 124,587,000 (0.5%)
2014: 123,931,000 (1.2%)
2013: 122,459,000 (1.1%)
2012: 121,084,000 (2.0%)
2011: 118,682,000 (1.0%)
2010: 117,538,000 (0.3%)
2009: 117,181,000 (0.3%)
2008: 116,783,000 (0.7%)One factor behind the slow growth is the hesitancy of the Millennial generation to establish households. Since 2007, the number of households headed by 25-to-34-year-olds has increased by just 3.5 percent versus an 8.8 percent overall gain. Another factor behind the slow growth is stagnation in households headed by non-Hispanic Whites, the number falling slightly between 2016 and 2017. In contrast, the number of households headed by Asians, Blacks, and Hispanics grew by at least 1 percent.
Black households registered a larger gain in median income than any other race or Hispanic origin group, according to the Census Bureau’s Current Population Survey. The Black (alone or in combination) 2016 median of $40,065 was 6.3 percent higher than the $37,681 median of 2015, after adjusting for inflation. The median income of non-Hispanic White households grew 2 percent, and the Asian (alone or in combination) and Hispanic medians grew 4.0 and 4.3 percent, respectively…
Median household income in 2016 (and % change 2015-16; in 2016 dollars)
Asian: $80,822 (4.0%)
Black: $40,065 (6.3%)
Hispanic: $47,675 (4.3%)
Non-Hispanic White: $65,041 (2.0%)
American households spent an average of $57,311 in 2016, according to the Bureau of Labor Statistics’ Consumer Expenditure Survey. That’s a bit more than they spent in 2015 ($56,684), after adjusting for inflation, but still 0.5 percent below what they spent a decade ago in 2006 ($57,618)–the year household spending peaked.
Most age groups spent more in 2016 than in 2006, however. Householders aged 65 or older boosted their spending the most, with a 10 percent increase during those years, after adjusting for inflation. Households headed by adults ranging in age from 25 to 44 still haven’t caught up to the spending of their counterparts in 2006, in part because fewer households in the age group are headed by married couples–the biggest spenders.
Average household spending in 2016 (and % change since 2006; in 2016 dollars)
Under age 25: $34,438 (+2.6%)
Aged 25 to 34: $52,838 (-6.7%)
Aged 35 to 44: $66,444 (-2.9%)
Aged 45 to 54: $71,166 (+3.8%)
Aged 55 to 64: $61,346 (+1.5%)
Aged 65-plus: $45,756 (+9.6%)
Asian, Black, and non-Hispanic White households spent more in 2016 than in 2015, after adjusting for inflation. The 2015-16 rise in average household spending was 4.3 percent for Asians, 3.0 percent for Blacks, 1.4 percent for non-Hispanic Whites, and 1.1 percent for the average household, according to a Demo Memo analysis of the Bureau of Labor Statistics’ Consumer Expenditure Survey. Hispanic households spent 2.6 percent less in 2016 than in 2015.
The 2016 spending of Black and non-Hispanic White households has never been greater, finally surpassing the peak of the pre-Great Recession years. Asians and Hispanics have yet to close the gap…
Average household spending in 2016 (and % change since 2006; in 2016 dollars)
Average household: $57,311 (-0.5%)
Asian households: $67,267 (-1.8%)
Black households: $42,127 (+2.3%)
Hispanic households: $47,023 (-8.3%)
Non-Hispanic White households: $61,697 (+0.9%)
College enrollment–including two-year, four-year, and graduate schools–climbed to 19.2 million in 2016 after falling each year since 2011, according to the Census Bureau. Four-year college enrollment reached an all-time high of 11.2 million in 2016. Enrollment at two-year schools fell to the lowest level since 2006 and was 26 percent below its 2010 peak. Graduate school enrollment was stable.
College enrollment in 2016
Total enrollment: 19.2 million (peak of 20.4 million in 2011)
Two-year schools: 4.3 million (peak of 5.9 million in 2010)
Four-year schools: 11.2 million (all-time high)
Graduate schools: 3.7 million (peak of 3.9 million in 2010)
Minority students have accounted for nearly all of the increase in college enrollment since 2000, according to the Census Bureau’s school enrollment data. The number of Asian, Black, Hispanic, and other minorities enrolled in the nation’s colleges (including two-year, four-year, and graduate schools) grew 81 percent between 2000 and 2016. Non-Hispanic White enrollment inched up by 1.1 percent during those years. Consequently, minorities are a growing share of college students.
Minority share of college students
Asian, Black, Hispanic, and other minority students account for the 51 percent majority of students at two-year schools. They are 42 percent of students at four-year schools, and 41 percent of students at graduate schools.
Millions of Americans play video games, according to a Pew Research Center survey. This is the percentage who play (on a computer, TV, game console, cellphone, or other portable device) by age…
Often or sometimes play video games
Aged 18 to 29: 60%
Aged 30 to 49: 53%
Aged 50 to 64: 32%
Aged 65-plus: 24%
Young men are most likely to play video games. Among men under age 30, 72 percent often or sometimes play games versus 49 percent of their female counterparts. Among people aged 50 or older, however, men and women are about equally likely to often or sometimes play video games–27 percent of men and 30 percent of women.
The Census Bureau first collected data on household computer ownership in 1984 and internet use in 1997. This is how the figures have changed since then…
Percentage of households with a computer (desktop, laptop, or handheld)
Percentage of households that use the internet
A new survey promises to provide interesting details on labor force trends. The New York Fed’s Survey of Consumer Expectations (SCE) Labor Market Survey will examine, every four months, labor market experiences, job transitions, job search efforts, job offers, offer wages, acceptable wages, wage satisfaction, retirement expectations, and much more.
The results from the July 2017 survey–the first to be released, with comparable quarterly data back to 2014–show that 17 percent of survey respondents (a nationally representative sample of adults) had received at least one job offer in the past four months. The average wage offered was $49,250. Among the currently employed, 10.5% expect to be working for a new employer within the next four months.
The minimum acceptable wage respondents would be willing to take for a new job is $57,964, the survey finds. Among college graduates, the minimum acceptable wage (reservation wage) is $76,610. Among those without a college degree, $47,202. There are many more juicy tidbits in the first data release, including findings by age, sex, and income as well as education.
Half of American households moved into their current home in 2008 or later, according to the American Housing Survey. For homeowners, 2003 is the median year they moved into their home. For renters, the median year is 2013. Here is the distribution of households by the year the householder moved into the unit…
Year householder moved into home
2010 or later: 44.2%
2005 to 2009: 16.0%
2000 to 2004: 11.8%
Before 2000: 28.0%
Individual retirement accounts hold 25 percent of all retirement plan assets in the U.S., reports the Employee Benefit Research Institute. In the 7th annual update of its IRA Database, EBRI estimates a median balance of $31,742 in the IRAs of individual owners in 2015. The average balance was $125,045. Here are median balances by age of owner…
Median IRA account balances
Under age 25: $3,565
Aged 25 to 29: $4,622
Aged 30 to 34: $7,113
Aged 35 to 39: $11,244
Aged 40 to 44: $16,738
Aged 45 to 49: $23,439
Aged 50 to 54: $31,440
Aged 55 to 59: $41,733
Aged 60 to 64: $57,859
Aged 65 to 69: $78,612
Aged 70-plus: $80,968
IRA balances are modest because few owners contribute in a year’s time–only 14.1 percent contributed in 2015. Those with Roth IRAs are more likely to contribute (26 percent) than those with traditional IRAs (7 percent). Among those who contributed, only 54 percent contributed the maximum allowable amount.
Millions of Americans provide informal, unpaid care for people aged 65 or older with aging-related problems–helping them with household chores, taking them to the doctor or grocery store, managing their finances, and so on. The Bureau of Labor Statistics’ American Time Use Survey collects data about this informal care. Here are a few of the highlights from the 2015-16 report…
More than 1 in 10 Americans provide eldercare: The 41 million who provided eldercare in the past three or four months are a substantial 16 percent of the population aged 15 or older.
Eldercare providers are in every age group: More than 1 in 10 young adults (aged 15 to 24) provide eldercare. The figure climbs as high as 24 percent among 55-to-64-year-olds.
Men account for 44 percent of providers: Although women are the majority of providers, men account for a substantial share in every age group.
Many eldercare providers are caring for more than one person: 71 percent of eldercare providers are caring for one person, while 29 percent are caring for two or more.
Caring for a friend or neighbor is common: 16 percent of eldercare providers are caring for a friend or neighbor. Among caregivers aged 65 or older, the figure is 27 percent.
On an average day, about one in four caregivers provides eldercare: Those who provide care spend an average of 2.8 hours doing so.
Most eldercare providers have been helping for years: More than half of caregivers have been providing eldercare for three or more years.
One in three Americans is obese, up from one in five two decades ago. Here is the trend…
Percent of people aged 20 or older who are obese (body mass index of 30kg/m^2 or higher)
These numbers, from the National Center for Health Statistics’ National Health Interview Survey, are based on self-reported heights and weights and likely understate obesity. After all, who doesn’t trim a few pounds and add a few inches when asked to report their dimensions. For an unbiased measure of obesity, the National Center for Health Statistics actually measures the heights and weights of a nationally representative sample of the population through the National Health and Nutrition Examination Survey. Those efforts revealed a larger 36 percent of adults to be obese in 2011-14, up from 22 percent in 1988-94.
Americans move for many reasons, such as for better housing, to be closer to family, or for a new job. The Census Bureau collects data on the reasons people move. In 2006, it added the reason “natural disaster” to the list following the devastation caused by Hurricane Katrina.
Between 2015-16, only 17,000 people moved because of natural disaster, making it the least common reason for moving during the year. In 2005-06, following Katrina, an astonishing 669,000 people moved because of natural disaster–nearly 2 percent of all moves during the year and outnumbering those who moved because of retirement, for a change of climate, health reasons, or to look for work. Since then, the number of people who have been forced to move because of a natural disaster has ranged from a handful to 177,000–well below the Katrina level. Next year when the Census Bureau releases geographic mobility data for 2017-18, we will see what Hurricanes Harvey, Irma, and Maria do to these numbers.
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