Inflation has surpassed the increase in the median income of American households by 0.12% in the last decade.
The long answer is that it depends on the state you are. Because income and prices have not changed the same way everywhere.
Let’s take a look at the changes that have occurred in the last decade.
This visualization uses data from the US Census Bureau for median household income and the Bureau of Labor Statistics (BLS) for data on the Consumer Price Index (CPI)
It is worth noting that the CPI data of the BLS includes the prices of food and energy, unlike the CPI used by the Federal Reserve in the past, which did not contain them.
At the national level, the median income of American households (that is, those that are exactly in the middle of the list) has grown 20.62% in the last ten years. From $ 46,242 to $ 55,775, which represents an increase of $ 9,533.
On the other side, the CPI has grown by 20.73% over the same period. The difference between the two gives us the previously mentioned value of 0.12%
The main culprit of this number seems to be the financial crisis of 2008. In the four years after the crisis, the purchasing power of American households fell by 8.31%.
Just by 2012, the change in median income exceeded the CPI once more, with a difference of 0.02%.
However, not all states were losers in the last ten years. And many others were affected to a greater extent than national statistics show.
For example, the District of Columbia presented an increase of 28.02% in its purchasing power.
If we only include the states, North Dakota was the big winner with an increase of 20.88%. Followed by its southern neighbor with 7.92%.
On the other hand, Nevada was the most affected state in the last decade, with a reduction in its purchasing power of 16.61%. Followed by Georgia with a decrease of 13.21%. Florida, Rhode Island, and Michigan also reported reductions of over 10%.
In total, 33 states had reductions in their purchasing power greater than 1%, 12 of them had increases greater than 1%, and 5 ranged between -1% and 1%.
At a regional level, the highest price increases occurred in the western United States, with a cumulative CPI of 22.06% in the last decade. The south followed closely with 22.02%. The northeast and midwest had increases of 21.32% and 18.49% respectively.
Did you find this data interesting? Share your thoughts, suggestions, or questions in the comments below!
Income in the past 12 months (in inflation-adjusted dollars), Yearly American Community Survey 1-Year Estimates, United States Census Bureau.
Yearly Consumer Price Index Detailed Report Tables, Bureau of Labor Statistics.
TittyMcNippleFondler on May 18th, 2017 at 18:50 UTC »
So my money's worth something as long as I risk getting killed by a tornado. Good to know.
DrDan21 on May 18th, 2017 at 18:16 UTC »
For such a small difference it sure does feel like a heck of a lot more
Davkett on May 18th, 2017 at 15:31 UTC »
Where I got the data? (Source)
I got the income data from the yearly American Community Survey reports, which can be found on the Census Bureau's website
Inflation data was acquired from the Bureau of Labor Statistics. State inflation uses the regional average (West, South, Northeast and Midwest) since the BLS doesn't report the Consumer Price Index for each state, choosing major cities instead, this approach ended up leaving some states outside, so I opted for the next best option.
What tool did I use? (Tool)
D3. It's my first time using it actually, decided to try it after getting tired of Tableau, I welcome any suggestions :)
Only desktop and tablets use the interactive version of the visualization. Mobile version uses static images since I want to be gentle to your data plans.
About the data
Median household income has grown 20.62% in the last decade, from $46,242 to $55,775. In the same period prices have increased 20.73%.
So, American purchasing power have stagnated these last ten years? As a whole, yes. But things are different when we look at state data.
Edit: If you want a more optimistic explanation of the data look for u/YaDunGoofed comment below.
Purchasing power (measured here as the difference between income and price changes) for the District of Columbia has increased 28.02% over the last decade. Followed by North Dakota with 20.88%.
On the other side, Nevada has lost 16.61% of their purchasing power in the same period.
In total, 33 states had reductions in their purchasing power greater than 1%, 12 of them had increases greater than 1%, and 5 ranged between -1% and 1%.
PNG of the visualization in case you can't see it on the website.