U.S. Household Incomes Surged 5.2% in 2015, First Gain Since 2007

The boost leaves household incomes around 1.6% below the 2007 level

Incomes in the U.S. surged in 2015, delivering the first gain for the typical family in eight years.

The median household income—the level at which half are above and half are below—rose 5.2% from a year earlier, after adjusting for inflation, or $2,800, to $56,500, the Census Bureau said Tuesday.

The boost leaves household incomes around 1.6% below the 2007 level, before the last recession began, and around 2.4% below the all-time high reached in 1999.

The latest figures show how several years of robust growth in employment are finally helping a broad swath of the nation regain ground lost after several years of either flat incomes or sustained declines, particularly for lower-income households.

Last year’s 5.2% annual gain in median incomes is the largest jump since the Census Bureau began releasing such data in 1967.

The official poverty rate in 2015 was 13.5%, down from 14.8% in 2014, the report said. That was still slightly higher than in 2008 and up from 11.3% in 2000.

“Wages and incomes took a big battering that we’re just now recouping, and you could say there’s no Super Bowl parade, but this is really superb growth,” said Lawrence Mishel, president of the Economic Policy Institute, a left-leaning think tank in Washington.

At the current rate of growth, Mr. Mishel said annual household incomes could soon surpass their prerecession high. “We’re climbing out of a deep hole. We definitely can see the top, and we’ll get there next year even with normal growth,” he said.

Income gains were spread across nearly all age groups, household types, regions and racial or ethnic groups. One exception: Incomes didn’t rise for households living outside of metropolitan areas.

Tuesday’s numbers hint at how both sustained declines in unemployment and minimum-wage increases by states and local governments in recent years are lifting household incomes.

The largest increases in incomes were for households in the bottom fifth of all earners, while incomes declined slightly for households in the top fifth. The ratio between incomes for households at the 90th percentile and 10th percentile declined last year.

Among all full-time, year-round workers, women saw substantially larger earnings gains than men, posting an annual increase of 2.7%, compared with 1.5% for men. The increases narrowed the pay gap between women and men to the lowest level on record.

Non-citizens, who tend to earn less and have higher workforce participation rates than native-born workers, saw some of the largest increases in incomes last year. Median incomes of non-citizen households rose 10.5% to $45,100, while incomes of native-born households rose 4.4% to $57,200.

Tuesday’s income and poverty report is drawn from an annual survey asking detailed questions about annual incomes—including wages, dividends, child support and government benefits. The annual survey, collected in March with results released in September, is sent to around 95,000 households that are representative of the U.S. population.

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