A key economic measure tracking Americans’ inflation-adjusted income dropped in December, breaking a nearly year-long upward trend. The decline comes despite broader growth in GDP and stock markets throughout 2025.
The Real Median Household Income Index, published monthly by Motio Research, slipped by 0.3 percent in December 2025, the first decline since President Donald Trump resumed office in January of that year. This downturn, while modest, marks a shift after months of steady gains and may signal growing pressure on American household finances.
In its most recent research note, Motio placed December’s index at 118.6, down from 119 in November. This measure reflects real income, adjusted for inflation, and is based on monthly microdata from the U.S. Census Bureau. The latest figure puts median household income at $86,820, according to the group’s estimate.
Slowing Momentum Follows Strong Income Gains Earlier in 2025
Throughout 2025, Motio’s index of real household income had been trending upward, climbing from 116.7 in January to 119 in November. According to Motio Research, the December drop marks the first month-to-month fall since January of the same year. The broader trend had been one of recovery since the low points seen after 2020, when the index declined following the economic impact of the COVID-19 pandemic.
While the U.S. Census Bureau publishes official median income figures annually, Motio offers a monthly estimate to provide more current insights into household purchasing power. According to the think tank, the lag in federal data, where statistics for one year are only published in September of the following year, makes timely tracking difficult without alternative sources.
The most recent official data showed that real median income rose from $82,690 in 2023 to $83,730 in 2024, barely exceeding pre-pandemic levels. Motio’s monthly tracking suggests that 2025 brought faster gains, until December. “We believe that our monthly series offers a key, timely gauge of the economic well-being of American households.” the research group stated in its methodology.
Inflation, Debt and Labor Market Strains Weigh on Households
While economic headlines in 2025 highlighted gains in GDP and markets, other indicators suggest American households have been under increasing financial stress. According to a November report by the Bank of America Institute, nearly 24 percent of U.S. households were living paycheck to paycheck, defined as spending more than 95 percent of their income on necessities.
Motio’s December income data aligns with a broader picture of economic pressure. Persistent inflation, high consumer debt, and signs of weakness in the labor market have dampened consumer confidence. On Tuesday, the Conference Board reported that its monthly index of consumer sentiment had reached its lowest point since 2014. Both the “Present Situation” and “Expectations” sub-indexes recorded sharp declines.
Dana M. Peterson, chief economist at the Conference Board, noted that “confidence collapsed in January, as consumer concerns about both the present situation and expectations for the future deepened.” She added that consumer comments frequently mentioned price levels, including oil, gas, and food, alongside worries about politics, tariffs, and job security.
Though the overall economic outlook remains mixed, December’s dip in real income suggests that many Americans are still contending with financial uncertainty, even as headline economic indicators point to strength.
