Median US income rises to highest on record even as Americans feel affordability pinch

By Tami Luhby, CNN

(CNN) — Americans’ median household income rose to $87,460, or 2.6%, in 2025, the first year of President Donald Trump’s second term, according to Census Bureau data released Tuesday.

This is the highest household income, which is adjusted for inflation, since the agency started measuring it in 1967.

Despite the increase in income, many Americans are feeling financially squeezed as prices for groceries, utilities, housing costs and other essentials remain stubbornly high after years of high inflation during the Biden administration. Trump promised during the 2024 presidential campaign that he would quickly reduce prices and inflation, though that has yet to happen.

Both Republicans and Democrats have acknowledged that the nation is suffering from an affordability crisis, which has been exacerbated this year by the steep increase in gasoline and oil prices sparked by the US-Iran war.

Meanwhile, the poverty rate dipped by half a percentage point to 10.2% in 2025, and the uninsured rate stayed essentially the same at 7.9%. The poverty rate for children fell a percentage point to 13.4%, the lowest on record.

However, median earnings for full-time year-round workers did not change significantly in 2025, although women saw an increase in earnings of 3.2%.

Women in full-time year-round jobs earned 83.9% of what their male counterparts did in 2025, up from 80.6%. The jump, which follows two years of declines in the earnings ratio, is the first statistically significant annual increase since 2016.

Part of the disconnect between the increase in household income and median earnings is that the former includes income from part-time and part-year earnings, as well as from Social Security benefits, pensions and unemployment compensation, according to the Census Bureau.

The latest census report does not include sweeping cuts to Medicaid and food stamps — two of the nation’s key safety-net programs — that are part of the Republicans’ “One Big, Beautiful Bill,” which Trump signed into law in July 2025.

“These cuts are already taking food assistance and health care away from millions of people who need it, driving up poverty and hardship,” Sharon Parrott, president of the left-leaning Center on Budget and Policy Priorities, said in a statement.

She noted that food stamps lifted more than 3 million people out of poverty last year, according to the Census Bureau’s Supplemental Poverty Measure, which takes into account certain government benefits and household expenses.

State of Americans’ finances

The annual census report, an important measure of Americans’ economic well-being, is notable because Trump has repeatedly claimed the country is doing far better under his leadership than under his predecessor, former President Joe Biden.

“This has been the most successful two years financially and every other way in the history of the presidency,” Trump said at the Republican midterm convention last week.

Trump has brushed aside concerns about affordability, including gas prices, even as Republicans fear it could hurt them in the midterm elections in November.

Median income barely rose during the Biden administration, which had to contend with the aftermath of the economic upheaval wrought by the Covid-19 pandemic and a period of soaring inflation. Median household income did not return to its inflation-adjusted pre-pandemic peak until 2023 and remained essentially flat during Biden’s last year in office.

Notably, the Census Bureau’s median income figure does not include capital gains from stocks, which typically benefit higher-earning Americans. Those who have the means to invest have seen their wealth accumulate in recent years. The S&P 500 rose 16.39% in 2025, its third consecutive year of double-digit gains.

In 2025, all households saw their incomes increase, except for those in the bottom 10%, which saw no change.

Medicare grows, Medicaid shrinks

While the uninsured rate remained steady, there were notable changes in the share of people covered by federal health insurance programs.

Medicare coverage last year rose by 0.6 percentage points to 20.1%. Some 59.2 million people were enrolled in Medicare, up from 57.8 million — a reflection of the aging US population.

But Medicaid coverage fell by half a percentage point to 17.1%, the second straight year of declines. The Census Bureau attributes these drops largely to the expiration of a Covid-19 pandemic measure that barred states from disenrolling those on Medicaid who no longer qualify. States could once again drop ineligible recipients starting in April 2023, but the process took into 2024.

The share of people in job-based and Affordable Care Act policies essentially remained the same.

However, the uninsured rate is expected to rise in 2026 and coming years since the expiration of Affordable Care Act’s enhanced premium subsidies and the Medicaid cuts in the One Big Beautiful Bill are expected to result in millions of people losing their health insurance.

“Many of the policies enacted in July 2025 through H.R.1 are on a long fuse, with just some of the massive cuts taking effect last year and many more on tap in the coming years,” Wendy Chun-Hoon, executive director of the left-leaning Center for Law and Social Policy, said in a statement, referring to the GOP package.

This story has been updated with additional information.

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