The US poverty rate fell to a record-low 10.2% in 2025, representing a 0.5 percentage point decrease from the previous year, according to Census Bureau data released Tuesday. This marks the second consecutive annual decline in the poverty rate, reaching the lowest level since relevant statistics began being recorded. Despite this historic improvement, 34.5 million people remained below the poverty line, highlighting the scale of economic challenges facing American households. The poverty threshold for a family of two adults and two children was less than $32,649 annually in 2025. As reported by Reuters, the decline came as policymakers debate the impact of federal spending cuts on safety-net programs.
Child poverty achieved a historic low of 13.4% in 2025, demonstrating significant progress in reducing economic hardship among younger populations. The official child poverty rate also fell to this record low, while the Supplemental Poverty Measure, which accounts for taxes, credits, and benefit programs, remained statistically unchanged at 13.1% compared to 2024. Social Security alone kept 28.8 million people above its threshold, providing crucial support to vulnerable households. The Gini index used to measure income inequality held steady, indicating that the income gains were distributed relatively evenly across different income levels.
Real median household income reached a record $87,460, marking a 2.6% increase from $85,210 in 2024, but this growth masks concerning underlying trends. According to new Census Bureau data, the typical U.S. household's annual earnings have risen only 2.5% since 2019, with the 2025 figure only slightly above the previous peak set in 2019. In contrast, median household income climbed 19% during the six years before the pandemic, from 2013 to 2019. The gains were broad-based, with household income rising 1.7% at the 90th percentile while showing no significant change at the 10th percentile. However, University of Michigan's Kristin Seefeldt noted that the median income for the top earners is increasing, while income for the lowest earners is stagnant, with the tax code revised to lower marginal tax rates benefiting high earners.
The Census figures show women's paychecks rose 3.2% last year, while men's declined slightly, narrowing the gender wage gap significantly. Women in full-time, year-round work saw higher median earnings by about 3%, while men in similar positions saw a decline of 0.9%. The solid gain for women narrowed the gender wage gap, though it remains substantial, with women earning nearly 84 cents for every dollar earned by men, up from less than 81 cents in 2024. This improvement in women's earnings contributed to the overall median income growth, but experts warn that the underlying economic stagnation remains concerning.
Despite the positive poverty rate data, experts remain cautious about the sustainability of these improvements, with concerns about the impact of recent policy changes. University of Michigan's Amanda Nothaft warned that the poverty numbers do not reflect cuts in benefits that started to take effect at the start of 2026, as OBBBA instituted new restrictions to Medicaid and food stamps. The top 10% of earners reported income growth of 1.7% last year to $261,300, while the poorest one-tenth reported a slight decline to just over $20,000. University of Chicago's Steven Durlauf noted that the massive tax and spending bill passed by Congress last year slashed Medicaid, food assistance and other public benefits that have kept millions above the poverty line. The main challenge identified is that prices and inflation are outstripping wage growth, leading to diminished real incomes for many Americans, with experts expecting grimmer statistics in next year's report.
