Median household income has begun to recover over the last two years, but households still have not come close to regaining the purchasing power they had before the financial crisis began, a new study says.
The study, issued Wednesday by two former Census Bureau officials, suggests why many people remain glum even though the economy is growing and unemployment has declined.
Although inflation-adjusted median annual household income rose to $52,100 in June, from its recent trough of $50,700 in August 2011, it remained $2,400 lower a 4.4 percent decline than in June 2009, when the recession ended.
This drop, combined with the 1.8 percent decline that occurred during the recession, leaves median household income 6.1 percent or $3,400 below its level in December 2007, when the slump began.
Since the end of the recession, the study said, household income has declined for all but a few population groups.
Some of the largest percentage declines occurred for groups whose income was already well below the median, like African Americans, Southerners, people who did not attend college, and households headed by people under age 25.
"Groups with low incomes tended to have steeper declines in income," said Gordon Green Jr., who wrote the report with John Coder, a colleague at Sentier Research, which specializes in analyzing household economic data.
Households headed by people ages 65 to 74 were the only group in the study that experienced a statistically significant increase in post-recession income, helped both by the continued increase in Social Security benefits and by the decision of some older workers to remain in the workforce or re-enter it.
The figures, adjusted for changes in the cost of living over time, include income before taxes and exclude capital gains.
The number of households with income above the median is the same as the number below it.
The economy has been growing since 2009, but more slowly and inconsistently than many Americans would like and many economists and policymakers had predicted. President Barack Obama has made the economy's condition his main focus this summer, promising new efforts to encourage economic growth, including a series of proposals on higher education that he is expected to announce today.
While taking credit for some improvement in the economy, he has acknowledged that many Americans have yet to see the benefits.