Census Bureau reports US family income rose 2.6% in 2025; poverty fell to 10.2%

Analysts say safety-net cuts could erode 2025 gains in future tallies

The Census Bureau’s annual report on family income, poverty, and health insurance coverage, released Tuesday, shows that 2025 was a year of real economic improvement for American households — gains that analysts said could be eroded by cuts to the social safety net and renewed inflationary pressure.

The average family’s income rose 2.6% in 2025 after adjusting for inflation, reaching $87,460, according to the report. The share of people living in poverty fell to 10.2% from 10.7% the prior year, bringing the number of Americans below the poverty line down to 34.5 million from 36 million in 2024.

The gains were unevenly distributed. Families in the top 10% of the income distribution saw income gains of 1.7%, while those in the bottom 10% saw little change. African American families posted the largest average income increase of any group measured — 4.8% — but at $59,980, the median income among Black families remains well below that of white families ($91,930) or Asian families ($126,300).

The supplemental poverty measure, which accounts for taxes, government benefits and additional expenses, showed higher overall poverty at 13.1% — essentially unchanged from 2024. The supplemental measure captures the poverty-reducing effect of programs like SNAP and other government benefits, which the official rate does not.

Health insurance coverage held steady in 2025, but the report signals turbulence ahead. Enhanced subsidies for Affordable Care Act coverage have now lapsed, and stricter work requirements for Medicaid are set to take effect next year.

“Things like SNAP and Medicaid made a really big difference in lowering poverty and expanding health coverage,” said Sharon Parrott, president of the Center on Budget and Policy Priorities, which NPR describes as left-leaning. “Instead of building on that improvement and recognizing the record of success of things like SNAP and Medicaid, Republican policymakers enacted very deep cuts, historically large cuts that right now are taking food assistance and health coverage away from people, putting upward pressure on poverty, increasing the ranks of the uninsured, and really taking us in the wrong direction.”

The report lands against a sharply different economic backdrop than the one it describes. The 2025 data captures a year in which families saw real improvements in purchasing power, but Americans now face five consecutive months in which prices have climbed faster than average wages. NPR reported that stubborn inflation has been rekindled by the war with Iran. The Atlanta Fed Wage Growth Tracker, which measures composition-adjusted wage growth for the median continuously-employed worker, stood at 4.1% as of mid-September, while the University of Michigan’s measure of one-year-ahead inflation expectations held at 4.2%.

Parrott framed 2025 as a benchmark for what the safety net had achieved. “We saw these modest gains. We saw some improvement in poverty. We saw health insurance hold steady at relatively low rates. And we saw real wage gains,” she said. “And on almost every measure, things are worse today.”

The Census Bureau’s snapshot captures the most recent year for which comprehensive data is available; subsequent annual tallies are likely to reflect the impact of the safety-net reductions enacted in the GOP-led tax package passed last year, while health insurance coverage is expected to fall with the lapse of enhanced Affordable Care Act subsidies and the new Medicaid work requirements.