US Poverty Rate Fell to 10.2% in 2025, Before Inflation Turned Hotter

The US poverty rate fell to 10.2% in 2025. Real median household income reached a record $87,460, according to Census Bureau data.

The Bureau released the figures on Tuesday. They cover the calendar 2025 only. That leaves out the swings in inflation and other economic shifts since the Iran war began.

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

The poverty rate dropped 0.5 percentage points, yet 34.5 million people remained below the line. Median household income climbed 2.6% from $85,210 in 2024, the Census Bureau reported.

The gains skewed upward. Household income rose 1.7% at the 90th percentile, but showed no significant change at the 10th. The Gini index used to measure income inequality also held steady. Child poverty fell to a historic low of 13.4%

However, the Supplemental Poverty Measure held at 13.1%, statistically unchanged from 2024. That gauge counts taxes, credits, and benefit programs. Social Security alone kept 28.8 million people above its threshold.

Treasury Secretary Scott Bessent highlighted the figures during House testimony. Democrats used the same hearing to press him on gas prices and mortgage costs.

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What Has Changed Since the Survey Closed

The income gains recorded in 2025 now face a different economic backdrop. Inflation stayed at or below 3% across 2025. Prices rose 3.4% in the 12 months through August 2026.

Brent crude has moved above $100 a barrel again, and diesel set a record $6 a gallon. The 30-year fixed mortgage rate topped 7% last week.

Meanwhile, real average hourly earnings fell 0.3% over that stretch, BLS figures show. Longer hours, however, lifted real weekly earnings by 0.3%.

The labor market has shown some improvement. Employers added 162,000 jobs in August, compared with an average monthly gain of 31,000 over the previous year. Unemployment remained at 4.1%.

Household debt also continued to rise, reaching $18.8 trillion in the second quarter. About 4.7% of outstanding balances were in some stage of delinquency, according to the New York Fed.

The Federal Reserve announces its rate decision on Wednesday, with Chairman Kevin Warsh signaling concern about inflation. The next household income reading will not be available until September 2027.

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