WASHINGTON — U.S. household incomes rose strongly for the second straight year in 2016, as the long-running economic recovery generated broad gains in prosperity.
The median household income was $59,039 in 2016, an increase of 3.2 percent over the year before after adjusting for inflation, the Census Bureau said Tuesday. The share of Americans living in poverty declined, and the share with full-year health insurance increased, the bureau also reported.
The strong gains will probably sharpen the political debate between President Donald Trump, who is pressing to overhaul the nation's economic policies, and Democrats who now have more ammunition to argue that the changes Trump seeks would mess with success.
The most immediate battle will be over Trump's push for large tax cuts.
"The challenge for policymakers now is to build on the last few years' progress and not worsen poverty and inequality," said Robert Greenstein of the Center on Budget and Policy Priorities, a liberal research organization. He said that many of the items on Trump's agenda "would raise poverty, widen inequality, or reduce health insurance coverage."
The Census Bureau data paint a picture of widespread improvement in the final years of the Obama administration. The gains in 2015 were the largest on record. Median household income increased by 5.2 percent, the largest jump since record keeping began in 1967.
The gains in 2016 pushed median household income to the highest level on record, but officials cautioned the figure was affected by a change in methodology in 2013, and that actual incomes probably had not exceeded the previous peak, in 1999.
The Economic Policy Institute, a liberal research organization based in Washington, estimated that without the change in methodology, median household income was still roughly 2.3 percent below the record high — and 1.6 percent below the level reached in 2007.
Moreover, the gains have accrued disproportionately to the most affluent Americans. The mean household income for the poorest fifth of households fell by $571 over the decade that ended last year, adjusting for inflation. The mean for the wealthiest fifth of households increased by $13,479, also adjusting for inflation.
Trump campaigned on a pledge to lift the nation's fortunes and to repair what he described in his inaugural address as "this American carnage." He has called for cuts to federal taxes and spending, broad reductions in regulation and limits on foreign trade.
He also promised to repeal and replace the health care law.
The poverty rate fell for the second straight year. The Census Bureau reported that 12.7 percent of households lived in poverty in 2016, representing a total of 40.6 million people. That was down from 13.5 percent of households and 43.1 million people in 2015.
The data showed that the ranks of those with health insurance coverage continued to grow last year. Only 8.8 percent of the population lacked insurance for the full year, down from 9.1 percent in 2015.