Family income rose and poverty fell in 2025 — but safety net cuts could erase gains

The average American family made more money last year than in 2024, while the number of people living in poverty fell slightly, according to a new report from the Census Bureau.

The annual snapshot of last year's family income, poverty and health coverage comes as Americans are currently wrestling with stubborn inflation that's been rekindled by the war with Iran. Prices have been climbing faster than average wages for the last five months.

Planet Money Newsletter Has the economy gone C-shaped? In 2025, by contrast, families saw real improvements in their purchasing power. The average family's income rose 2.6% last year, after adjusting for inflation, to $87,460. Families at the top of the income ladder saw bigger gains than those at the bottom.