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Significant Growth in U.S. Household Incomes Reported for 2023

According to recent estimates from the Census Bureau Current Population Survey, the national median household income rose approximately 4% from 2022 to 2023. Although this figure might appear modest at first glance, it marks the most substantial annual surge observed since 2019. After a notable 7% increase from 2018 to 2019, income levels stagnated or experienced slight declines until this year.

Looking at state-level data, the variations in income are even more pronounced. South Dakota emerged as a standout, registering the highest increase both in dollar terms and as a percentage of growth. The median household income in South Dakota soared to $81,740 in 2023, a significant jump from $69,850 in 2022. This increase of $11,890 represents a remarkable 17% rise.

South Dakota’s prominent growth can be attributed to its status as one of the fastest-growing states in terms of population, as highlighted in a recent Pew analysis. Many newcomers seem to be relocating with higher salaries, as South Dakota ranks 21st in a recent SmartAsset report on net inflow of households earning $200,000 or more annually.

In contrast, six U.S. states recorded substantial increases in household incomes, with growth rates exceeding 10%. Among these, Arkansas and West Virginia stood out due to their considerable gains, even though they remain among the states with the lowest average incomes.

However, not all states fared well in 2023. Eleven states reported declines in median household income levels. Maryland experienced the most significant drop, with a 9% decrease, marking it as the only state to see a decline exceeding five figures. Despite this, Maryland’s median household income of $102,000 still ranks among the highest in the nation—a drop of $10,500 from the previous year.

Contributing to this downturn, Maryland lost over 2,000 households earning $200,000 or more from 2021 to 2022, as noted in SmartAsset’s analysis. The state’s economy has reportedly been stagnant since 2017, according to a 2023 report by the state’s comptroller.

Furthermore, in 2024, Maryland slid nine places to rank 31st in CNBC’s annual listing of the best states for business, largely due to deteriorating infrastructure and challenges in fostering a business-friendly environment.

North Dakota followed closely behind Maryland, experiencing a 6% decrease in median household income.

In summary, while some states celebrate notable income growth, others face challenges that highlight the disparities in economic conditions across the country. As the data continues to unfold, the implications for household finances and state economies may shape future policies and migration trends.

Source
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