“…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
“…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
“Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
“…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
“Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
“…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
“…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
“…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
“…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
“…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
“…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
“A full-throated defense of economic dynamism.” - The Wall Street Journal
AI Summary.Using 5.1m product listings from Sears catalogs, the authors construct a quality-adjusted price index implying much lower goods inflation for 1900–1990 than standard deflators, with real goods consumption growing 39x rather than 10.3x. They estimate faster growth before World War II (5.4% a year, 1900–1939) than after (4.2%, 1946–1980).
Verónica Bäcker-Peral and Benjamin WittenbrinkMassachusetts Institute of Technology
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Using 5.1mm Sears catalog listings and LLM-based hedonic estimation, this study finds real goods consumption grew 39-fold from 1900 to 1990, not 10.3-fold as official data imply, with the largest mismeasurement concentrated before WWII.
Does quality-adjusted pricing show faster goods consumption growth before the war?
Core argument: Using a quality-adjusted price index built from 5.1 million Sears catalog listings, the authors estimate real goods consumption grew by a factor of 39 between 1900 and 1990, compared with a factor of 10.3 using standard goods deflators.
Measuring real GDP growth requires distinguishing changes in prices from changes in product quality... systematic quality adjustment. price indexes are unavailable for much of the twentieth century. We construct a new quality-adjusted price index using 5.1 million product listings from Sears catalogs, 1900–1990. The resulting cost-of-living index implies substantially lower goods inflation than conventional deflators between 1900 and 1990, real goods consumption grew by a factor of 39 using our index,compared with a factor of 10.3 using standard goods deflators. Figure 5 shows our estimates of the cost-of-living index for consumer goods in the solid red line. The dashed black line shows average cumulated price changes for the same sample of consumer goods. The gap.is largest before World War II, reversing the conventional view that goods consumption growth was slower before 1945 than in the post-war decades.As Gordon puts it, 'the history of price changes from 1914 to 1947 [is] the black hole where little is known.' This paper sheds light on that black hole. We estimate average annual real goods consumption growth of 5.4% for 1900-1939 and 4.2% for 1946-1980... the era of fastest growth was in the prewar, not postwar, contrary to conventional estimates.
Takeaways by Macro Roundup® AI
Using a quality-adjusted price index built from 5.1 million Sears catalog listings, the authors estimate real goods consumption grew by a factor of 39 between 1900 and 1990, compared with a factor of 10.3 using standard goods deflators.
The authors estimate average annual real goods consumption growth of 5.4% for 1900–1939 and 4.2% for 1946–1980, implying the fastest growth came in the prewar rather than postwar era, contrary to conventional estimates.
The new cost-of-living index implies substantially lower goods inflation than conventional deflators, with the gap largest before World War II, a period Gordon describes as "the black hole where little is known.".
Related Articles:
European vs. U.S. Economic Performance: An Update— Productivity growth from 2000-2019 was higher in the US than in western Europe, but almost half the gap disappears when information and communications technology is excluded, even though tech was 9.2% of US output versus 5.4% in the EU. The author estimates this difference in industrial mix accounts for roughly 40% of the overall productivity growth gap.
Is The Great Stagnation Actually Just a ‘So-So’ Stagnation?— Long-running U.S. tests show population average reading scores moved from 255 to 256 out of 500 and math from 266 to 271, despite educational attainment rising more than three years. The author argues that if added schooling has not raised productivity, measured total factor productivity growth has been understated, shrinking the apparent "Great Stagnation" by about a third.
AI Summary.The author argues that a surge in money growth beginning in 2020 put upward pressure on inflation to a degree unprecedented in the sample period since 1967, and that subsequent monetary tightening produced strong disinflationary pressures. Had policymakers tracked money growth using a price-target model, they might have tightened sooner and avoided some of the inflation.
Peter Ireland, Stephen Miran and Nouriel RoubiniHudson Bay Capital
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Ireland, Miran, and Roubini compare the actual price level to the predictions of an equilibrium model relating prices to money supply. Predicted inflation hit a 60-year high in 2020–21, months before inflation surged and then crashed once the Fed hiked.
Would tracking money growth have helped policymakers tighten sooner?
Core argument: The money growth surge beginning in 2020 and continuing into 2021 put upward pressure on inflation to a degree unprecedented in the post-1967 sample period, according to the graphs in Figure 3.
The graphs in Figure 3 show quite clearly how the surge in money growth starting in 2020 and continuing in 2021 put enormous upward pressure on inflation, to a degree unprecedented in the post-1967 sample period. And while the large and negative price gaps that followed in 2022 and 2023 are likewise indicative of strong disinflationary pressures applied through subsequent monetary tightening, one can’t see these graphs without asking: Had Federal Open Market Committee members been monitoring measures of money growth with the help of the P-star [price target based on monetary aggregates] model, might they have ended QE and raised interest rates sooner and more quickly, thereby avoiding at least some of the post-2020 inflation? Of course, massive fiscal expansion was another driver of the post-2020 surge in inflation, as suggested by fiscal theories of the price level. The model simply observes that regardless of its originating source, excessive money growth signals that inappropriate macroeconomic policies are fueling higher inflation. Fiscal expansions that expand money supply will be reflected in a P-star model.
Takeaways by Macro Roundup® AI
The money growth surge beginning in 2020 and continuing into 2021 put upward pressure on inflation to a degree unprecedented in the post-1967 sample period, according to the graphs in Figure 3.
The large negative price gaps of 2022 and 2023 indicate strong disinflationary pressures from subsequent monetary tightening, raising the question of whether FOMC members using the P-star model would have ended quantitative easing and raised interest rates sooner and more quickly.
Massive fiscal expansion was another driver of the post-2020 inflation surge, as suggested by fiscal theories of the price level, and fiscal expansions that expand the money supply are reflected in a P-star model.
Related Articles:
Money and Inflation— The M2 money supply has contracted for the first time in sixty years, shrinking at an annual rate of nearly 5%, yet inflation has remained high rather than turning to deflation. The author argues this undercuts the claim that money supply growth drives inflation, since the same logic implies severe deflation should now follow.
State Dependence of Monetary Policy During Global Supply Chain Disruptions— The authors present descriptive evidence that global supply chain disruptions were associated with elevated transportation costs, goods supply-demand imbalances, and a surge in goods prices, steepening the aggregate supply curve. In the disrupted state, a contractionary monetary policy shock produces muted responses in real output and spare capacity but a substantially stronger decline in goods prices.
What Next for r*? A Capital Market Equilibrium Perspective On The Natural Rate of Interest— A capital-market equilibrium model estimates that the steady-state safe natural rate of interest across advanced economies has fallen from about 5% to about 0%, driven by slower growth, demographics, higher mark-ups, and rising risk premia. The author estimates that artificial-intelligence-driven growth and heightened inflation risk could each raise it by about 1 percentage point.
AI Summary.Across countries, unexpectedly higher government deficits relative to earlier International Monetary Fund forecasts are associated with unexpectedly higher inflation, measured by each factor's contribution to the increase in public debt, a relationship the author finds statistically significant. This evidence is consistent with a fiscal channel for inflation.
Ricardo ReisLondon School of Economics and Political Science
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Reis compares the IMF’s 2019 forecasts of increases in the public debt over the next 5 years with the actual increases. In OECD countries where deficits turned out to be higher than the IMF expected, inflation also turned out to be unexpectedly higher.
Do unexpectedly larger government deficits coincide with unexpectedly higher inflation across countries?
Core argument: Across the IMF World Economic Outlook country sample, unexpected increases in public debt from unexpected deficits and from inflation over 2019–25 show a statistically significant positive relation.
To inspect the fiscal mechanism, I compare the IMF’s 2019 forecasts for the increase in the public debt over the next 5 years, with the actual increase that we saw. The IMF also puts out forecasts for each term in the accounting identity linking current to future debt in equation (7). Using these forecasts, I constructed the expected increase in debt due to expected inflation, interest rates, economic growth, and fiscal deficits. Then, using the April 2025 actual values for what each of these variables were, I constructed the actual increase in public debt due to the actual evolution of each of these four variables. Subtracting one from the other gives the unexpected increase in public debt, broken down into four unexpected terms, for each country in the WEO sample. Figure 9 plots two of these terms: the unexpected increase in public debt due to unexpected deficits, and the unexpected increase in the debt due to inflation in 2019-25 per country. The figure shows a clear positive relation, which is statistically significant. This says that for countries where deficits turned out to be higher than the IMF expected, inflation also turned out to be unexpectedly higher, using the common metric of their impact on the public debt. The fiscal mechanism is validated using the expectations data. If fiscal developments lead the IMF to raise its expected deficits, then this past experience should lead it to raise its expected inflation as well.
Takeaways by Macro Roundup® AI
Across the IMF World Economic Outlook country sample, unexpected increases in public debt from unexpected deficits and from inflation over 2019–25 show a statistically significant positive relation.
Comparing the IMF's 2019 five-year forecasts for debt, inflation, interest rates, growth, and deficits with April 2025 actual values decomposes the unexpected increase in public debt into four unexpected terms.
Countries whose deficits turned out higher than the IMF expected also saw unexpectedly higher inflation, measured by each variable's impact on public debt, which the author reads as validating the fiscal mechanism.
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Fiscal Influences on Inflation in OECD Countries, 2020-2022— Across 21 economies, the authors find that headline and core inflation responded positively to a measure of government spending increases scaled by pre-pandemic debt-to-GDP and average debt duration. Estimated coefficients of 0.4–0.5 suggest 40–50% of the extra spending was financed through inflation, with the rest through conventional public finance.
Are Government Bonds Safe in Times of War and Pandemic?— Government bonds severely underperform in wartime, in absolute terms and relative to equities, housing, and economic growth, unlike in financial crises when bonds tend to outperform stocks. The U.S. and U.K. reduced war-driven debt-to-GDP ratios without explicit default, using surprise inflation and financial repression that shifted fiscal burdens onto bondholders.
Global Debt Report 2026— Gross central government borrowing across OECD countries rose 7% to a record $17tn, about 23% of GDP, and is projected to reach roughly $18tn, or 24% of GDP. The United States and Japan account for close to 80% of the area's refinancing requirements, with the US share rising from 57% to 70%.
AI Summary.Gross central government borrowing across OECD countries rose 7% to a record $17tn, about 23% of GDP, and is projected to reach roughly $18tn, or 24% of GDP. The United States and Japan account for close to 80% of the area's refinancing requirements, with the US share rising from 57% to 70%.
OECD StaffOrganisation for Economic Co-operation and Development
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Across the OECD last year, $13.5T of governmental debt needed refinancing, 70% ($9.5T) of which was US debt, up from 57% in 2020. The US and Japan were outliers in refinancing requirements relative to GDP.
How high has government borrowing across advanced economies risen?
Core argument: OECD central government gross borrowing rose 7% in 2025 to a record USD 17 trillion from about USD 16 trillion in 2024, and is projected to reach roughly USD 18 trillion in 2026.
The gross borrowing requirements of central governments in the OECD area continued the upward trajectory that began in 2023. This followed decreases in 2021 and 2022 after the large spike in issuance in 2020 at the onset of the COVID-19 pandemic. Borrowing increased by 7% in 2025, rising from around USD 16 trillion in 2024 to a record USD 17 trillion, and it is projected to reach around USD 18 trillion in 2026. As a share of GDP, gross borrowing decreased by almost 1 p.p. to 23% in 2025, but it is projected to rise again to 24% in 2026. Annual refinancing requirements reached a record high in nominal terms in 2025, but declined as a share of GDP. [Sustained output growth resulted in the debt stock as a share of GDP in the OECD area remaining stable at 83% in 2025]. A few large issuers account for the majority of refinancing requirements in the OECD area, with the United States and Japan representing close to 80% of the total (Figure 1.2, Panel B). However, while the share accounted for by Japan declined from 16% in 2020 to 7% in 2025, that of the United States increased from 57% to 70%.
Takeaways by Macro Roundup® AI
OECD central government gross borrowing rose 7% in 2025 to a record USD 17 trillion from about USD 16 trillion in 2024, and is projected to reach roughly USD 18 trillion in 2026.
Gross borrowing as a share of OECD GDP fell by almost 1 percentage point to 23% in 2025 and is projected to rise to 24% in 2026, while the debt stock remained stable at 83% of GDP amid sustained output growth.
The United States and Japan account for close to 80% of OECD refinancing requirements, with the US share rising from 57% in 2020 to 70% in 2025 as Japan's declined from 16% to 7%.
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The Budget and Economic Outlook: 2026 to 2036— The Congressional Budget Office projects the federal deficit will grow from $1.9tn (5.8% of GDP) to $3.1tn (6.7%) over a decade, above the 3.8% averaged over the past 50 years, with rising net interest costs driving much of the increase. Federal debt held by the public is projected to rise from 101% to 120% of GDP.
Are Government Bonds Safe in Times of War and Pandemic?— Government bonds severely underperform in wartime, in absolute terms and relative to equities, housing, and economic growth, unlike in financial crises when bonds tend to outperform stocks. The U.S. and U.K. reduced war-driven debt-to-GDP ratios without explicit default, using surprise inflation and financial repression that shifted fiscal burdens onto bondholders.
Across The Rich World, Fiscal Crises Loom— An analysis estimates most rich countries could keep debt stable as a share of their economies with only small primary surpluses—Britain's required surplus is 0.3% of GDP—even if all debt were refinanced immediately at current rates, but the tightening needed to stabilize debt ratios exceeds 2% of GDP in Britain and America and 3% in France.
AI Summary.Average US weekly pay has risen 31% over six years, outpacing prices, but inflation erased most of those gains. Grocery prices are up about 30% since early 2020, a young married couple now needs 70% of annual household income for an average down payment versus 58% in 2019.
Mark Niquette, Jennah Haque and Jade KhatibBloomberg
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The US price level has risen 26% since January 2020, leaving Americans’ average weekly real wages up only 3.7% over five years.
Why do Americans feel squeezed when wages outpaced prices?
Core argument: Average American weekly pay has risen 31% over the past six years, outpacing prices in the aggregate, but inflation wiped out most of those income gains, and low earners now lag after leading wage growth following the pandemic.
The average American’s weekly pay has risen 31% over the past six years. That’s faster than prices across that period, so Americans in the aggregate aren’t losing ground — but inflation wiped out most of their income gains. For low earners, who saw the fastest wage growth after the pandemic, the last year or so has been tougher and they’re now lagging behind. [Grocery] prices are up about 30% since January 2020, about in line with average wage growth. But Americans had gotten used to paying roughly the same at the supermarket each week in the pre-pandemic years. Lately, they’ve been forced to stomach a bigger bill with almost every visit. A double-punch has pushed homeownership out of reach for many Americans: First the pandemic-era surge in prices, and then a steep run-up in mortgage rates. A young married couple now needs 70% of their annual household income to afford the average down payment, according to Goldman Sachs economist Elsie Peng, up from 58% in 2019 and 45% in 2000. [Further], the average principal and interest payment has doubled since early 2020, according to the National Association of Realtors. Employee premiums for family health insurance have risen 23% in the past five years to almost $6,900 on average. And more than 20 million people who rely on Affordable Care Act plans face a hike in their premiums after Congress let Covid-era subsidies expire.
Takeaways by Macro Roundup® AI
Average American weekly pay has risen 31% over the past six years, outpacing prices in the aggregate, but inflation wiped out most of those income gains, and low earners now lag after leading wage growth following the pandemic.
A young married couple needs 70% of annual household income to afford the average down payment, up from 58% in 2019 and 45% in 2000, according to Goldman Sachs economist Elsie Peng, while the average principal and interest payment has doubled since early 2020, per the National Association of Realtors.
Employee premiums for family health insurance have risen 23% in the past five years to almost $6,900 on average, and more than 20 million people on Affordable Care Act plans face premium increases after Congress let Covid-era subsidies expire.
Related Articles:
The Cost of Money is Part of the Cost of Living: New Evidence on the Consumer Sentiment Anomaly— Variation in the University of Michigan consumer sentiment index that inflation and unemployment cannot explain is strongly correlated with growth in consumer borrowing costs, such as mortgage and car loan rates. The authors estimate that including interest payments and homeownership costs in the consumer price index would raise measured inflation from 3% to 9%.
Why Do We Dislike Inflation?— Survey evidence finds 80% of respondents believe prices rise faster than wages, though real weekly earnings for the median worker grew 1.7% between 2019 and 2023. About 40% think their nominal income would be higher had inflation been lower, and half expect wages to take over a year to catch up if inflation doubled.
A Mystery in Fixed Income— Long-term interest rates have drifted higher than short-term rates and oil prices would predict, an unusual pattern during Federal Reserve rate-cutting cycles. Proposed explanations include investor concern about growing Treasury debt issuance or an effective increase in the Federal Reserve's 2% inflation target.
AI Summary.The article argues that the hiring downturn in occupations most exposed to generative AI reflects interest-rate sensitivity rather than AI itself, since roughly 38% of workers in the most AI-exposed quintile work in information, finance and insurance, and professional and technical services, versus under 2% in the least-exposed quintile.
Zanna Iscenko and Fabien Curto MilletAgglomerations
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The downtick in hiring in AI-exposed occupations started 6 months prior to the release of ChatGPT, and is “perfectly” aligned with the start of Fed rate hikes in Spring 2022. Sectors in the most AI-exposed quintile tend to be interest-sensitive.
Is the hiring slowdown in AI-exposed jobs driven by interest rates?
Core argument: Roughly 38% of workers in the most AI-exposed quintile of occupations work in Information, Finance and Insurance, or Professional and Technical Services, versus under 2% in the least-exposed quintile, according to an analysis of 2023 Census data.
The sharp downturn in hiring for AI-exposed occupations aligns perfectly with the Federal Reserve’s monetary policy timeline. The key to understanding the misattribution of this downturn to AI is that “AI exposure” and “interest rate sensitivity” are deeply correlated variables. The occupations rated as most exposed to generative AI are not randomly distributed across the economy. An analysis based on 2023 Census data reveals that occupations in the top quintile of AI exposure are overwhelmingly concentrated in sectors like “Information”, “Finance and Insurance”, and “Professional and Technical Services”. Approximately 38% of workers in the most AI-exposed quintile are employed in these sectors, compared to less than 2% in the least-exposed quintile. These are precisely the sectors most sensitive to capital costs and broad economic uncertainty.
Takeaways by Macro Roundup® AI
Roughly 38% of workers in the most AI-exposed quintile of occupations work in Information, Finance and Insurance, or Professional and Technical Services, versus under 2% in the least-exposed quintile, according to an analysis of 2023 Census data.
The author argues that the hiring downturn in AI-exposed occupations has been misattributed to AI because "AI exposure" and interest rate sensitivity are deeply correlated, with the most exposed sectors also the most sensitive to capital costs and economic uncertainty.
The author contends that the sharp downturn in hiring for AI-exposed occupations aligns with the Federal Reserve's monetary policy timeline.
Related Articles:
Canaries in the Coal Mine? Six Facts about the Recent Employment Effects of Artificial Intelligence— Using payroll records covering millions of US workers, the authors find employment for workers aged 22–25 in occupations most exposed to artificial intelligence, such as software developers and customer service representatives, declined 6%, while employment for older workers in those occupations rose 6–9%. Employment in less-exposed occupations grew comparably across age groups.
AI and Jobs: The Final Word (Until the Next One)— Unemployment has risen by 0.30 percentage points for the fifth of workers most exposed to artificial intelligence, compared with 0.94 percentage points for the least exposed fifth, leaving no visible AI effect on jobs. The share of workers leaving the labor force within a year is lowest among the most AI-exposed workers and roughly flat.
Our Favorite Charts of 2025— Wage growth is slowing more for lower-paid workers than for higher earners, limiting those households' ability to keep spending, while hiring is concentrated in select industries such as healthcare and among larger firms as small private firms shed workers. Layoffs remain low, but the number of workers unemployed for 27 weeks or more has only rarely been higher.
AI Summary.Prices fell for 51 of 67 consumer items tracked over a two-year period in China, while the broader GDP deflator, which includes upstream sectors, declined for 10 straight quarters, indicating deflation is more entrenched in industry. The share of "zombie" firms whose profits cannot cover debt interest rose from 19% to 34% over five years.
BloombergBloomberg Staff
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A Bloomberg analysis finds that prices dropped on 51 of 67 products and services in China over the past two years. 34% of Chinese firms are unable to cover interest on their debt – a 25-year high – as China’s deflationary spiral worsens.
How deeply has deflation taken hold in China's industrial sector?
Core argument: Prices fell on 51 of 67 items tracked by Bloomberg News over the last two years, while China's GDP deflator, which includes upstream sectors, has declined for 10 straight quarters, indicating deflation is more entrenched in industry.
Among 67 items tracked by Bloomberg News, prices on 51 dropped over the last two years. A broader gauge that includes upstream sectors, known as the GDP deflator, has been steadily declining for 10 quarters, indicating that deflation is much more entrenched in the industrial sector. Polysilicon, the raw material for solar panels, saw prices drop to less than a fifth of its peak in 2022. Prices for steel rebar, widely used in construction, fell to an eight-year low in May. Across the market, company results show the same pressures: the share of “zombie” firms — those whose profits can’t cover interest payments on their debt — rose from 19% to 34% over the past five years; capital and R&D spending fell for most companies, a first in a decade; and more than a third of companies across industries cut jobs in 2024.
Takeaways by Macro Roundup® AI
Prices fell on 51 of 67 items tracked by Bloomberg News over the last two years, while China's GDP deflator, which includes upstream sectors, has declined for 10 straight quarters, indicating deflation is more entrenched in industry.
Polysilicon, the raw material for solar panels, has fallen to less than a fifth of its 2022 peak price, and steel rebar used in construction hit an eight-year low in May.
The share of Chinese "zombie" firms whose profits cannot cover debt interest payments rose from 19% to 34% over five years, capital and R&D spending fell for most companies for the first time in a decade, and over a third cut jobs in 2024.
Related Articles:
How NOT To Negotiate With China— Trade diversion signals deep distress in China's export sector, and the author argues a sustained 10% tariff hike would be more credible than larger ones and could counter China's rare earths leverage. Easing up on Chinese exporters instead signals weakness and discourages Europe from coordinating with the US.
China’s Youth Unemployment Soars To 2-Year High As Job Crunch Deepens— China's urban unemployment rate for 16- to 24-year-olds excluding students rose to 18.9% from 17.8%, the highest since the National Bureau of Statistics revised its calculation method for the series. A record 12.2m university students graduated into a job market strained by deflationary pressures and external uncertainties, with many struggling to find roles matching their education and skills.
Xi Overcapacity Fight Leaves Economy Vulnerable Without Stimulus— China's total debt has risen to over 300% of gross domestic product from a little over 200% a decade ago, and with the main policy rate at 1.4%, the central bank has limited room to cut. Price declines are more widespread than in past deflationary episodes, and large-scale stimulus remains off the table.
AI Summary.U.S. median household income was $83,730, not statistically different from the prior year's $82,690, according to Census Bureau estimates. Across most demographic subgroups, median household income was higher or not statistically different from the prior year, with the exception of Black households, which saw a decline.
Melissa Kollar and Zach SchererU.S. Census Bureau
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Real median household income was $83,730 in 2024, effectively flat from 2019’s $83,260.
Did median household income change over the past year?
Core argument: Median U.S. household income was $83,730 in 2024, not statistically different from the 2023 estimate of $82,690.
This report provides estimates of household income, income inequality, and worker earnings in the United States for 2024. Median household income was $83,730 in 2024, not statistically different from the 2023 estimate of $82,690. For most demographic subgroups analyzed, the median household income estimates in 2024 were either higher or not statistically different from 2023, with the exception of Black households, which experienced a decline in median household income.
Takeaways by Macro Roundup® AI
Median U.S. household income was $83,730 in 2024, not statistically different from the 2023 estimate of $82,690.
Across most demographic subgroups analyzed, 2024 median household income estimates were either higher than or not statistically different from 2023.
Black households were the exception among the subgroups analyzed, experiencing a decline in median household income.
Related Articles:
Trends in the Distribution of Family Wealth, 1989 to 2022— The Congressional Budget Office estimates that the top 10% of U.S. families held 60% of all wealth in 2022, up from 56% in 1989, with the top 1% holding 27%, up from 23%. The rest of the top half saw its share fall from 37% to 33%, while the bottom half held 6% in both years.
The Era of Big Raises for Low-Paid Workers Is Over— Wage growth for the bottom quarter of US earners was 3.7%, around the lowest since 2017, versus 4.7% for the top quarter, according to the Federal Reserve Bank of Atlanta. Bank of America customer data show after-tax pay up 1.6% year-over-year for the bottom third of households versus 2.9% for the top third.
The Unexpected Compression: Competition at Work in the Low Wage Labor Market— Labor market tightness produced an unexpected compression in the US wage distribution, with disproportionate wage growth at the bottom reducing the college wage premium and reversing nearly 40% of the rise in 90-10 wage inequality since 1980. The authors attribute this in part to increased competition for low-wage workers.
