Today we present a guest post written by Matías Scaglione again Romina Soriainventor of a scientific data and economic consulting firm Motio research.
In May 2024, we present our forecast for the 2023 Census household and real income data, using estimates derived from CPS microdata as forecasts. The forecast used March values from the unadjusted, unadjusted Motio series as the best estimate of the previous calendar year’s Census values (further reasoning can be found in the referenced blog post and at The post introduces the series). The strong correlation between March average values and Census average values is clearly seen in Figure 1.
Following our guiding principles of simplicity and clarity, we performed a simple regression to predict median household income for the 2023 Census, using the Motio series as only one predictor. This exercise revealed an expected average increase of 6.7% in US household income in 2023, rising from $74,580 to $79,547. Adjusted for inflation using the Chained Consumer Price Index, we forecast a real increase of 2.6%, from $77,510 to $79,547. As noted in a blog post in May, the expected increase “would be the first increase in real US household income after three consecutive declines from 2020 to 2022.” Figure 2 below shows the projected versus actual 2023 Census in historical context.
Census Bureau released 2023 Median Household Income estimates for September 10, 2024. The report confirmed our prediction of a recovery after three consecutive years of decline: “This is the first significant annual increase in median household income since 2019.” While the magnitude of the gain was higher than expected, with an estimated increase of 8.1% (compared to our 6.7% forecast) and an actual increase of 4.0% (compared to our 2.6% forecast), the Census estimates fell within our forecast range. . In addition, the recovery of household income means a return to the high pre-Covid values, which our public indicator already showed in the March 2024 estimate (see Figure 3).
The release of the 2023 Census annual estimates also confirmed the historically strong correlation between the Motio and Census household income series, and confirmed the reliability of Motio’s monthly estimates. This shows that the Motio median income series is independent of itself, providing a timely metric of US national economic well-being on a monthly basis.
This post was written by Matías Scaglione again Romina Soria.
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