In Poverty in the United States: 2023, the U.S. Census Bureau released updated estimates of the official poverty measure and the Supplemental Poverty Measure (SPM). Notably, the official poverty rate fell in 2023 by 0.4 percentage points to 11.1%, while the SPM rate increased by 0.5 percentage points to 12.9%. A primary reason for these results is the differences in the way poverty thresholds, or the definition of basic needs, are updated each year. To learn why the Census Bureau produces two different rates on poverty (the official poverty measure and the SPM), check out our recently released blog on the topic.

The official poverty measure has been produced since the 1960s and defines poverty by comparing pretax money income to a national poverty threshold that varies by family size and age of the householder. The poverty threshold was originally defined as three times the cost of a minimum food diet in 1963 and is annually adjusted for inflation using the Consumer Price Index for All Urban Consumers (CPI-U). The CPI-U is the headline inflation statistic produced monthly by the Bureau of Labor Statistics (BLS) and considers consumer spending across a number of different goods and services. Conceptually, the CPI-U is capturing a general sense of changes in cost of living over time.¹

First released in 2011, the SPM was developed after significant research and consideration following the 1995 National Academies of the Sciences panel on measuring poverty. The measure is produced in collaboration with BLS. The SPM defines poverty by comparing a wider definition of resources (including noncash government benefits, taxes and credits, and necessary expenses) to a threshold that is defined as 83% of the total spending of a median consumer unit on food, clothing, shelter, utilities, telephone, and internet (FCSUti). The thresholds are constructed for three housing tenure groups (owners with a mortgage, owners without a mortgage, and renters) and are adjusted for geographic variation in housing costs across the country. BLS produces SPM thresholds each year using information on FCSUti expenditures from five years of Consumer Expenditure Survey data, lagged by one year. To equalize the data across the five-year period, prior year expenditures are adjusted for inflation using a limited price index that includes only the FCSUti items.² As a result, year-to-year changes in the SPM thresholds reflect changes in a narrower definition of cost of living (through FCSUti inflation) and updated spending patterns on those items (through new data).