While most of the economic news in the U.S. these days has been negative, there is some new positive data. Median incomes are now at the highest level on record, despite the affordability crisis.

Median Incomes Reach Highest Levels in Recorded History

According to new data released by the U.S. Census Bureau on Tuesday, median incomes rose 2.6% to $87,460 during the first year of President Donald Trump's second stint in office. Even when accounting for inflation, this figure is good enough to be distinguished as the highest household income since the bureau began tracking in 1967.

The poverty rate fell by half a percentage point in 2025, now hovering at about 10.2%. Even better is that the poverty rate for children dropped a full percentage point to 13.4%, marking the lowest on record.

Although median earnings for full-time workers did not see any significant changes in 2025, women enjoyed a meaningful gain of 3.2%. That said, women working full-time still only earn 83.9% of what their male colleagues did in 2025. This percentage is up from 80.6% the prior year, showing that women are closing the salary gap.

The delta between the increase in overall household income and median earnings is because the former includes part-time earners, in addition to pension payments, Social Security benefits, and unemployment wages.

While the robust income gains are certainly welcome, skyrocketing inflation, high housing costs, and record-high fuel levels have put many Americans in a tough spot financially. Both political parties have acknowledged that the affordability crisis is something that needs to be addressed.

President Trump continues to downplay the issue of affordability. During the Republican midterm convention in Texas last week, the president said, "This has been the most successful two years financially and every other way in the history of the presidency." Trump also asserts that the country is faring better economically than it did under former President Joe Biden.

To Trump's point, median incomes were largely stagnant during the Biden administration. However, Biden came into office when the COVID-19 pandemic was still raging. Median incomes did not begin to pick up steam again until 2023.

The 2025 data notes that nearly all households saw their incomes increase. The exception to this was the bottom 10% of Americans, a demographic that saw no change.

The Census Bureau’s median income data does not take into account capital gains from stocks. This money is generally concentrated among the highest-earning Americans who have the ability to invest and grow their wealth.

What the Report Said About Health Insurance Coverage

The Census report also looks at health insurance rates. The number of uninsured remained steady; however, the number of Americans covered by Medicare increased by 0.6 percentage points to 20.1%. This translates to roughly 59.2 million people covered by Medicare, up from 57.8 million the prior year. This gain is due to natural aging of the population.

On the flip side, the number of Americans on Medicaid fell by half a percentage point to land at 17.1%. This marks the second straight year of declines, largely due to the expiration of the COVID-19 rule that prevented states from disenrolling participants who no longer qualified for the benefit. Now that states are allowed to drop ineligible recipients, the number of people covered by this program has also started to fall.

In other insurance data, the percentage of people who are uninsured and the number of Americans with employment-based or Affordable Care Act (ACA) coverage remain steady.

Unfortunately, the uninsured rate is predicted to be on an upward trajectory again in 2026 and beyond. The expiration of the ACA enhanced premium subsidies and cuts to Medicaid will make it more difficult for Americans to maintain their current levels of coverage. These cuts were made in 2025 as part of the Trump administration's One Big Beautiful Bill, known in official congressional terms as H.R.1.

According to Wendy Chun-Hoon, executive director of the left-leaning Center for Law and Social Policy, “Many of the policies enacted in July 2025 through H.R.1 are on a long fuse, with just some of the massive cuts taking effect last year and many more on tap in the coming years."

Critics of H.R.1 are warning that the poverty rate and number of uninsured will continue to increase in the years ahead due to cuts to health care and food assistance.  

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