The incomes of middle-class Americans rose last year by 5.2 percent, the first significant jump in pay since the end of the recession and the fastest increase ever recorded by the federal government, the Census Bureau reported Tuesday.
In addition, the poverty rate fell by 1.2 percentage points in 2015, the steepest decline since 1968. There were 43.1 million Americans in poverty last year, 3.5 million fewer than in 2014. The Census Bureau's average poverty threshold for a family of four in 2015 was $24,257.
The share of Americans who lack health insurance continued a yearslong decline, falling 1.3 percentage points, to 9.1 percent.
The numbers, from the government's annual report on income, poverty and health insurance, suggest to some economists that the recovery from recession is finally beginning to lift the fortunes of American workers and families.
"This exceeds the strong expectation that I already had," Jason Furman, chairman of President Barack Obama's Council of Economic Advisers, said in an interview, in which he called the income report the strongest ever from the Census Bureau. "The news here is the growth rates. I've read the last 21 reports, including this one. I have never seen one like this, in terms of, everything you look at is what you'd want to see or better."
Republicans discounted the improved outlook, saying the overall numbers remain weaker than they should be.
"[Tuesday's] report is another disappointing confirmation that too many Americans are still struggling to provide for their families and reach their full potential. The federal government invests billions of dollars each year in programs to help low-income Americans -- but more than 43 million people continue to live in poverty. It shouldn't be this way in America," House Ways and Means Committee Chairman Kevin Brady, R-Texas, said in a statement.
Real median household income was $56,500 in 2015, the bureau reported, up from $53,700 in 2014. The gain was a combination of rising wages in the economy -- spurred by a labor market where unemployment is falling and employers are being forced to compete more for workers -- and low inflation.
"This is something that fits into their broader narrative that things have gotten better, but by no means suggests that things are getting overheated," said Michael Gapen, chief U.S. economist at Barclays in New York.
The 5.2 percent income increase was the largest, in percentage terms, ever recorded by the bureau since it began tracking median income statistics in the 1960s.
Incomes increased for men and for women and across racial and ethnic groups. They grew most for the lowest-earning workers and least for the highest-earning ones, though all income groups saw improvement.
"The highest income growth was in the bottom fifth" of workers, "which is very welcome news," said Lawrence Mishel, president of the liberal Economic Policy Institute think tank.
The only weak spots were geographic: Median incomes rose by 7.3 percent for workers who live in major cities. For workers in rural areas, they did not rise at all.
All told, the gains brought median incomes nearly back to their levels before the recession, after adjusting for inflation, though they remain below 1999 levels.
Several measures had suggested that 2015 was strong for wage growth. Other indicators had pointed to an improvement for the Americans who are the worst off.
Half of the states and Washington, D.C., have increased their minimum wages since 2014, according to the liberal leaning Economic Policy Institute.
Greater competition for employers to fill low-wage jobs has also pushed up wages. The unemployment rate fell from 6.2 percent to 5.3 percent last year, and 2.4 million Americans found full-time, year-round jobs. That's forced restaurants and retail employers to lift pay to attract workers.
Wal-Mart; TJX Cos., which owns T.J. Maxx; and the Gap have all announced pay increases in the past two years. Starbucks said in July it would increase pay for all its employees by 5 percent later this year.
Income for the poorest 10 percent of households jumped 7.9 percent last year, while for the wealthiest 10 percent incomes rose just 2.9 percent.
"It has been a long slog ... but things are finally starting to improve for many American households," Chris Christopher, an economist at forecasting firm IHS said.
The census report also showed that the number of uninsured Americans continued to drop, as people take advantage of Obama's health care law.
The share of people in the United States uninsured for the entire year was 9.1 percent, or 29 million people. When compared with 2014, nearly 4 million people gained coverage during the year. The share of the population uninsured in 2014 was 10.4 percent, or 33 million people.
The report also found that women on average earned 80 percent of the income of men in 2015, a slight improvement from 79 percent in the previous year.
Information for this article was contributed by Jim Tankersley and Max Ehrenfreund of The Washington Post, Michelle Jamrisko and Patricia Laya of Bloomberg News and Christopher S. Rugaber and Jesse J. Holland of The Associated Press.
A Section on 09/14/2016