In 2025, the average income of American families increased compared to the previous year, and the number of people living in poverty has slightly decreased. This information is provided according to a new report from the United States Census Bureau.
Increase in Household Income
In 2025, the average household income reached $87,460, which is an increase of 2.6 percent compared to 2024. This increase has been calculated after adjusting for inflation. Higher-income families experienced a greater increase compared to lower-income families.
According to available data, while the average household income has increased, some families have performed better than others. Families in the top 10 percent of income saw an increase of 1.7 percent, while families in the bottom 10 percent saw little change in their income.
Impact of Cuts to Support Programs
Analysts warn that these achievements may be affected by cuts to social support programs. In 2025, programs such as Supplemental Nutrition Assistance Program (SNAP) helped many families stay out of poverty. However, some of these programs have been reduced as part of a larger tax cut package passed last year by the Republican Congress. The effects of these cuts are likely to be reflected in future census statistics.
Health insurance coverage remained stable in 2025, but due to the end of enhanced subsidies for Obamacare coverage, it is expected to decline. Additionally, stricter work requirements for the Medicaid program will be implemented next year.
Shiron Part, president of the Budget and Policy Priorities Center, states that programs like SNAP and Medicaid have had a significant impact on reducing poverty and expanding health coverage. He adds that instead of reinforcing this improvement and recognizing the successes of programs like SNAP and Medicaid, Republican policymakers have made deep and historic cuts that are currently stripping food assistance and health coverage from people and creating upward pressure on poverty.
The poverty rate decreased to 10.2 percent last year, down from 10.7 percent in 2024. In 2025, 34.5 million people in the country were below the poverty line, a decrease from 36 million people last year. An additional measure of poverty that considers taxes, government benefits, and additional costs shows the poverty level at 13.1 percent, which has not changed significantly from 2024.
While the average household income has increased over the past year, African-American households experienced the highest income increase at 4.8 percent, but their median income of $59,980 remains significantly lower than that of white and Asian families.
Part emphasizes that 2025 is somewhat of a turning point, and despite minor increases and improvements in poverty, the current situation has worsened based on almost all metrics.
Source: npr.org
