U.S. median income hits record as poverty falls

U.S. household income reached a record high in 2025 and the poverty rate declined, new Census Bureau data show, but the gains were modest and analysts warned that cuts to safety net programs could show up in future poverty and health coverage figures.

The typical American household earned $87,460 last year after adjusting for inflation, according to the Census Bureau report released Tuesday. That topped the previous inflation-adjusted peak of $85,320 set in 2019, before the pandemic and a period of sharp price increases.

The increase marks progress, but only a limited one. Median household income in 2025 was about 2.5% higher than in 2019, CBS News reported. By comparison, median household income rose 19% in the six years before the pandemic, from 2013 to 2019.

NPR reported that average family income rose 2.6% in 2025 after adjusting for inflation, with families at the top of the income ladder seeing bigger gains than those at the bottom. The top 10% of earners reported income growth of 1.7% last year, to $261,300, while the poorest one-tenth reported a slight decline to just over $20,000, according to the Census Bureau.

“It’s notable that the median income for the top earners is increasing, while income for the lowest earners is stagnant,” Kristin Seefeldt, associate professor of social work and public policy at the University of Michigan, told CBS News in an email. “The tax code has been revised to lower marginal tax rates for everybody, and we see the top earners benefiting from that.”

The Census report also showed women’s pay rose 3.2% last year, while men’s pay declined slightly. That narrowed the gender wage gap, though it remained substantial: women earned nearly 84 cents for every dollar earned by men, up from less than 81 cents in 2024.

Income gains also varied by race. NPR reported that African American families saw the largest increase in income last year, 4.8%, but their median income, $59,980, remained far below that of white families, at $91,930, and Asian families, at $126,300.

The official U.S. poverty rate fell to 10.2% in 2025 from 10.7% in 2024. That means 34.5 million people were living below the poverty line, down from 36 million the year before. A supplemental poverty measure, which includes taxes, government benefits and additional expenses, showed a higher poverty rate of 13.1%, little changed from 2024.

Analysts said programs such as the Supplemental Nutrition Assistance Program and Medicaid helped reduce poverty and maintain health coverage in 2025. But some of those programs are being scaled back under the “One Big Beautiful Bill” Act, a sweeping tax package President Trump signed into law in July 2025. CBS News reported that high-income households and corporations were among those receiving the biggest benefits from the tax cuts, according to tax experts.

The law also imposed new restrictions on Medicaid and food stamps, and food stamp enrollment fell sharply in 2026, CBS News reported. Some public policy experts cautioned that the impact of those changes may not appear until Census reports on 2026 income and poverty are released in 2027.

“The poverty numbers look pretty good — especially child poverty — but these numbers do not reflect cuts in benefits that started to take effect at the start of 2026,” said Amanda Nothaft, director of data and analysis at the University of Michigan’s Poverty Solutions.

Health insurance coverage held steady in 2025, NPR reported, but is expected to fall after enhanced subsidies for Obamacare coverage lapsed and as stricter Medicaid work requirements take effect next year.

“Things like SNAP and Medicaid made a really big difference in lowering poverty and expanding health coverage,” Sharon Parrott, president of the left-leaning Center on Budget and Policy Priorities, told NPR. She said policymakers enacted “very deep cuts” that are taking food assistance and health coverage away from people and putting upward pressure on poverty.

Parrott described 2025 as “a benchmark of sorts,” saying the data showed modest income gains, lower poverty, steady health coverage and real wage gains. “And on almost every measure, things are worse today,” she said.