By Howard Schneider
WASHINGTON (Reuters) -Inflation-adjusted income fell and a key poverty measure rose sharply last year as the U.S. economy continued its rocky emergence from a once-in-a-century pandemic, the U.S. Census Bureau reported on Tuesday.
The income and poverty data released by the Census showed how deeply the country's recent economic outcomes were influenced by the COVID-19 health crisis and the government response to it -- with a measure of child poverty more than doubling following the expiry of pandemic-era child tax credits last year, and the worst inflation in 40 years undercutting household spending power.
The child poverty rate, based on a supplemental measure that adjusts for government benefits and household expenses, jumped to 12.4% in 2022 from 5.2% in 2021.
Overall the supplemental poverty rate rose to 12.4% in 2022 from 7.8% in 2021, a change Census officials said was also driven largely by the expiration of pandemic-era programs.
Compared to 2019, before the pandemic, the overall supplemental rate was slightly higher than the 11.8% seen in 2019. The so-called official poverty rate was largely unchanged from 2021 at 11.5%.
Family incomes, meanwhile, largely failed to keep up with a 7.8% jump in consumer prices that was the largest since 1981.
Real median household income fell by 2.3% to $76,330, which Census officials said was about 4.7% below 2019.
The data cast into sharp focus issues likely to be at the front of voters' minds when they cast votes in the November 2024 elections, when U.S. President Joe Biden is seeking a second term.
Some 52% of Americans say they disapprove of the president's performance overall, according to Reuters/Ipsos polling, and voters rate the economy as their top issue.
In a statement on the social media platform X, Florida Governor Ron DeSantis, a candidate for the Republican presidential nomination, said "skyrocketing inflation" is "hurting our families." A White House official noted the Census report did not take into account the fact that the rate of inflation has eased in 2023.
"Today's Census report shows the dire consequences of congressional Republicans' refusal to extend the enhanced Child Tax Credit, even as they advance costly corporate tax cuts," Biden said in a statement.
The report offers one of the first clear glimpses of how the economy fared coming out of a health shock that shuttered stores and factories in 2020 and continued to stifle activity through much of 2021. The performance of the U.S. economy continues to confound, with stronger-than-expected growth despite rising Federal Reserve interest rates, yet with inflation still elevated as well.
The current unemployment rate of 3.8% is comparable to what it was in 2019, and Census officials noted that some aspects of the economy appear stronger than before -- with record numbers of women in the workforce, for example, and a poverty rate among Black Americans which, while far higher than the national average at 17.1%, hit a record low last year.
Household income also rose slightly for African American and Hispanic-headed households, while declining for others.
The changes in U.S. job patterns coming out of the pandemic, when the competition for labor was fierce among restaurant and other service businesses desperate for employees, also benefited lower-income and less educated workers. Inflation-adjusted median income rose 6.4% for households whose head did not graduate high school even as it fell for those with high school or college degrees.
But even some of the positive points continued to be distorted by the pandemic.
On a pre-tax basis, the United States last year registered a 1.2% decline in income inequality as lower- income workers registered slight wage increases while real incomes dropped for middle and upper-income earners. It was the first statistically significant drop in income inequality since 2007.
Yet the expiry of pandemic-era refundable tax credits offset that, with income inequality on an after-tax basis rising more than 3%.
The report also showed that 92.1% of Americans were covered by health insurance for at least part of 2022, higher than the 91.7% the year prior.
(Additional reporting by Trevor Hunnicutt, Susan Heavey and Rami Ayyub in Washington; Editing by Doina Chiacu, Aurora Ellis, Andrea Ricci and David Gregorio)