Local Household Income Rises

Photo by Paul McCarthy | Flickr Photo by Paul McCarthy | Flickr


Household income rose in southwestern Pennsylvania last year, but regional gains fell short of the record increase seen across the nation, according to U.S. Census Bureau data.

Median household income increased 3.4 percent to reach $54,080 a year in the Pittsburgh Metropolitan Statistical Area in 2015.  Nationally, the median household income rose 5.2 percent, increasing from $53,718 in 2014 to $56,516 in 2015 – the largest increase since 1967, when the Census Bureau began reporting the data.

The median household annual income means that half the households in the region earn more than that amount and half earn less.


“The economy has been growing since 2009, but the gains haven’t really been broadly based.  They’ve been growing in upper income households,” said Gus Faucher, deputy chief economist with the PNC Financial Services Group.  “The fact that we saw the median increase last year, and the fact that it increased for all economic groups, means that we’re finally beginning to see the benefits of the economic expansion shared broadly.”

Contributing to the increase in the national median household income were more jobs, higher wages – particularly for middle to low-income earners – and low inflation..

While the region has also enjoyed low inflation, the jobs picture has not been as rosy as what has been seen across much of the nation in recent years.

The less dramatic increase in the Pittsburgh MSA can be attributed at least in part to the recent downturn in the region’s energy industry, Faucher said. Last year, for example, the industry experienced job losses and managers received smaller bonuses.

The average weekly wage in the region fell in the first quarter of this year compared to the first quarter of 2015. And the region shed 1,900 jobs between August 2015 and August 2016, a 0.2 percent decline, according to preliminary U.S. Bureau of Labor Statistics survey data.

“While the recession was much milder here than in the rest of the country, the area has lagged in job growth over the past few years,” Faucher said. “The concentration in areas like education and health care tend to be less exposed to national business cycle.”

Another limiting factor for the region is its relatively large population of people aged 65 and older. Social security payments only rise with the rate of inflation, for instance.

Nevertheless, he said, such a significant increase in national and regional median household income is “good news for the economy. It’s good news for consumer spending. We’re more stable when everyone is seeing the benefits of economic expansion.”