On Sept. 10, 2024, the U.S. Census Bureau will release a new report comparing estimates of median income and earnings between 2022 and 2023 and historical income and earnings dating back to 1967. The report, Income in the United States: 2023, is based on information collected in the 2024 and earlier Current Population Survey Annual Social and Economic Supplements (CPS ASEC) conducted by the Census Bureau.

To account for changes in the cost of living, the Census Bureau adjusts all prior year income and earnings estimates for inflation. There are numerous price indexes available to the Census Bureau to use for this adjustment. As of last report year, the Census Bureau uses the Chained Consumer Price Index for All Urban Consumers (C-CPI-U), produced by the Bureau of Labor Statistics (BLS), to inflation adjust income estimates from 2000 onward. In prior reports, the Census Bureau used the Consumer Price Index for All Urban Consumers Retroactive Series (R-CPI-U-RS, formerly known as the Consumer Price Index Research Series [CPI-U-RS]), also produced by BLS to adjust historical income estimates for inflation. The Census Bureau will continue to use the R-CPI-U-RS to adjust income estimates from before 2000. For more information about the decision to begin using the C-CPI-U, which follows a recommendation from an Interagency Technical Working Group on Consumer Inflation Measures and a multiyear period of public engagement, visit Alternative Inflation Indices for Adjusting Historical Income Estimates From the CPS ASEC.

According to the C-CPI-U, prices increased by 4.0% between 2022 and 2023. This estimate represents a substantial fall in the inflation rate from 2022, which was 7.8%.

In nominal terms, meaning unadjusted for inflation, the median income for all U.S. households in 2022 was $74,580. In real terms, meaning adjusted to 2023 dollars, median income in 2022 was $77,540. The difference (4.0%) reflects the inflation rate between 2022 and 2023 according to the C-CPI-U. When the Census Bureau releases income and earnings statistics for 2023, the estimated change in income and earnings between 2022 and 2023 will compare the 2023 nominal estimates to the real 2022 estimates (adjusted to 2023 dollars). The difference between the two sets of estimates (both in 2023 dollars) will reflect any change in real income and earnings between the two years.

Check out Alternative Inflation Indices for Adjusting Historical Income Estimates From the CPS ASEC for more information about why the Census Bureau decided to begin using the C-CPI-U, the relative merits of alternative inflation indexes, and implications for the CPS ASEC’s historical estimates of income and earnings.