Since the beginning of what has come to be known as the “Great Recession” at the end of 2007, the US economy has been struggling. After the worst had finally passed, the economy started to grow again, and people started to get back to work. However, one piece of the puzzle has been elusive: the return to income levels, adjusted for inflation, back to those of pre-recession times.
Finally, according to Sentier Research, incomes have returned to, and even trumped, where they were before the financial crisis.
An average American family earned $57,153 in December 2015, an amount 4.3 percent higher than it was a year earlier, and 1 percent above incomes in December 2007. The last few months have seen rapid gains in income, the fastest in the history of the taking of the survey, which goes back to 2000. Projecting to the future, if the present pace continues this year, household incomes will reach a new record high long before the coming elections in November.
The problem of stagnant income has been baffling economists since 2011. That year the GDP, the total economic output, went beyond the pre-recession high. Yet median income stayed low, just until recently. Unfortunately for most wage-earners, even though the economy seemed to have recovered, it did so without employees.
Experts believe the coming year will be the best for income growth in many years. The unemployment rate is the lowest it has been since 2007. With labor scarce income is bound to rise. If it continues to rise in January as it did in December, median incomes will finally surpass those from 2000.
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