Top 10% income fell 14% while median family income rose 7% between 2021 and 2024
The average real income of families in the top 10% of earners fell 14% between 2021 and 2024, according to data released by the Federal Reserve on Friday. In contrast, the median American family's income rose 7% in inflation-adjusted terms over the same period. The figures, drawn from the Survey of Consumer Finances, indicate that income inequality declined during the post-pandemic period, a finding that runs counter to narratives of a K-shaped economy. The top decile's average real income dropped to $652,000 from $757,000, with both figures expressed in 2025 dollars. This contraction occurred alongside an exceptionally tight job market and the highest inflation in decades, followed by aggressive interest rate hikes by the Federal Reserve.
The average real income of families in the top 10% of earners fell 14% between 2021 and 2024, according to data released by the Federal Reserve on Friday. In contrast, the median American family's income rose 7% in inflation-adjusted terms over the same period. The figures, drawn from the Survey of Consumer Finances, indicate that income inequality declined during the post-pandemic period, a finding that runs counter to narratives of a K-shaped economy. The top decile's average real income dropped to $652,000 from $757,000, with both figures expressed in 2025 dollars. This contraction occurred alongside an exceptionally tight job market and the highest inflation in decades, followed by aggressive interest rate hikes by the Federal Reserve.
While income compression favored lower earners, wealth accumulation followed a different trajectory. Families in the top 10% of income saw their median net worth rise 31% from 2022 to 2025. By comparison, the median family's net worth increased by only 2% during that span. Families in the bottom 40% of income experienced a slight decline in net worth between 2022 and 2025. The Survey of Consumer Finances is collected and released every three years; the current release covers the 2025 survey, with income questions referring to the preceding calendar year. Consequently, the income data compares 2024 with 2021, capturing the shift from the early part of the Biden administration to near its end.
Federal Reserve researchers noted in a footnote that top earners derive income from volatile sources, primarily capital gains and business income. Significant swings in these sources can produce large movements in average figures. The data also aligns with evidence that blue-collar workers received larger raises than higher-earning white-collar professionals during the tight labor market and inflationary episode of 2021 and 2022. The survey further highlights the impact of interest rate hikes on borrowers. From 2022 to 2025, the median debt payment-to-income ratio climbed by two points to reach 15.4%. Additionally, the proportion of households with debt payments exceeding 40% of their income, a marker for high obligations, expanded from 6.5% to 8.6%, matching levels last recorded in the 2013 survey.