US Poverty Rate Dipped to 10.2% in 2025 Amid Record Income Levels

According to Census Bureau figures, the US poverty rate declined to 10.2% in 2025, while real median household income hit a record $87,460.

The data, released by the Bureau on Tuesday, covers only the 2025 calendar year. This excludes the volatility in inflation and other economic changes that followed the start of the Iran war.

American Household Incomes Climbed to $87,460 Last Year While Poverty Slipped

The poverty rate decreased by 0.5 percentage points, though 34.5 million individuals still lived below the poverty line. The Census Bureau reported that median household income rose 2.6% from $85,210 in 2024.

The improvements were concentrated at the top. At the 90th percentile, household income increased by 1.7%, but there was no statistically meaningful change at the 10th percentile. The Gini index, which tracks income inequality, remained unchanged as well. Child poverty dropped to 13.4%, a historic low.

Yet the Supplemental Poverty Measure stayed at 13.1%, not statistically different from 2024. This metric accounts for taxes, credits, and assistance programs. Social Security alone kept 28.8 million people above its poverty line.

Treasury Secretary Scott Bessent pointed to the numbers during testimony before the House. At the same hearing, Democrats pressed him on gasoline prices and mortgage expenses.

What Has Changed Since the Survey Closed

The income gains recorded in 2025 now confront a different economic landscape. Throughout 2025, inflation remained at or below 3%. In the 12 months ending August 2026, prices climbed 3.4%.

Brent crude has risen above $100 a barrel again, and diesel reached a record $6 a gallon. Last week, the 30-year fixed mortgage rate went above 7%.

BLS data indicate that real average hourly earnings fell 0.3% during that period. However, longer workweeks boosted real weekly earnings by 0.3%.

The labor market has shown some signs of recovery. Employers added 162,000 jobs in August, compared with an average monthly gain of 31,000 over the prior year. The unemployment rate held at 4.1%.

Household debt kept rising, reaching $18.8 trillion in the second quarter. The New York Fed reported that about 4.7% of outstanding balances were in some phase of delinquency.

The Federal Reserve is set to announce its rate decision on Wednesday, with Chairman Kevin Warsh expressing concern about inflation. The next household income data will not be released until September 2027.