Household income rose in just 5 states last year. Is your state one of them?

Sharon Parrott, president of the Center on Budget and Policy Priorities, a left-wing public-policy think tank based in Washington D.C., called the decline in income “disappointing.” 

“While more people were working and nominal wages rose, high inflation in 2022 eroded those gains for many,” she said. 

While 17 states saw their household income decline over the past year, five states saw an increase — Alabama, Alaska, Delaware, Florida and Utah. 

These 17 states saw a decline in income last year:

• Connecticut

• Illinois

• Indiana

• Iowa

• Maryland

• Massachusetts 

• Michigan 

• Minnesota 

• Missouri 

• Nebraska 

• New Hampshire 

• Ohio 

• Oregon 

• Pennsylvania 

• Vermont 

• Virginia

• Wisconsin

Income in the remaining U.S. states remained broadly stable, according to the Census Bureau’s report, released this week. Washington D.C. had the highest median annual household income in the nation with $101,027, followed by New Jersey ($96,346). Mississippi had the lowest median annual household income at $52,719. 

Although the labor market has relatively remained tight over the past year, it remains a challenging time for many Americans. 

Hourly wages rose 4.3% year-over-year in August, although Federal Reserve officials would like to see wage growth slow to pre-pandemic levels of 3% or less. 

Annual inflation was 3.7% in July compared to a year ago, the Bureau of Labor Statistics said this week. Although it was inline with most economists’ expectations, the monthly gain was the biggest increase in 14 months and the annual rate rose compared to the prior two months. Inflation hit a recent peak of 9.1% in June 2022. 

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In July, the Federal Reserve raised its benchmark interest rate by a quarter of a percentage point to a 22-year high, and signaled it is prepared to raise rates again to temper “elevated” inflation. That decision increased the Fed’s benchmark interest rate to a range of 5.25% to 5.5%, the highest the Fed target rate has been since 2001.

There were no pandemic-related stimulus payments last year, and the enhanced child tax credits have also expired. Child poverty in the U.S. more than doubled in 2022, and poverty is also rising for Americans aged 65 and above, according to the Census Bureau’s annual poverty report, also released this week.