Every three years, the Federal Reserve conducts a survey of consumer finances, collecting information about family income, net worth, balance sheet components, credit use and other financial outcomes. The results of this survey were published in late September with some surprising results.

During the three years covered, real gross domestic product grew at an annual rate of 2.5%, the unemployment rate fell from 5.0 to 3.8 percent. These changes in aggregate economic performance were unevenly reflected in the income of families with different characteristics. Following are some results from the survey:

Between 2016 and 2019, median family income grew 5% while the mean (average) declined 3%. The numbers suggest that those in the bottom half of the income scale did far better than those in the upper half, suggesting that income distribution narrowed during the last three years. This pattern stands in contrast to the 2010-2016 timeframe when the opposite occurred when mean income vastly outpaced median income and the income distribution widened considerably.

Between 2016 and 2019, families that were high wealth, had a college education, or identified as white non-Hispanic experienced proportionately smaller income growth than other groups of families but continued to have the highest incomes.

In grouping families by wealth, families at the top of the  distribution experienced a sharp decline in average income (following particularly outsized gains over the 2010-2016 period), whereas families in the lower and middle portions of the wealth distribution all showed modest gains.

In grouping families by the reference person’s educational attainment, those with a college degree experienced relatively large declines in both median and mean income, whereas those with a high school diploma and some college experience saw gains. More broadly, the income gaps between those families with a college degree and those without one decreased.

Black non-Hispanic families and white non-Hispanic experienced similar growth in median income but mean income fell for white non-Hispanic families and rose slightly for Black non-Hispanic families.

The report goes on to note that improving economic activity, along with rising home prices and increased equity values supported increases in mean and median net worth.  The National Core Logic Home Piece Index increased 5.2% annually during the three-year timeframe. The value of the equity holdings averaged 11.2% increase annually according to a broad stock index, leading to significant inflation adjusted gains in equity holdings. Those changes resulted in the following changes in the distribution of household net worth:

Between 2016 and 2019, median net worth grew 18% and mean net worth rose a modest 2%. In contrast, the 2010–2016 saw outsized gains in mean net worth relative to median net worth, again meaning the upper half of the populace benefitted far more than the lower half.

Families at the top of the income and wealth distributions experienced very little, if any, growth in median and mean net worth from 2016 to 2019 after experiencing large gains between 2013 and 2016.

Families near the bottom of the income and wealth distribution generally continued to experience substantial gains in the median and mean net worth between 2016 and 2019.

The homeownership rate increased between 2016 and 2019 to 64.9%, a reversal of the declining trend between 2004 and 2016. For families that own a home, the median home housing value increased to about $120,000 from about $106,000 in 2016.

Nearly two thirds of working-class families participated in retirement plans in 2019, down slightly from 2016. Participation continued to be uneven across the income distribution. Less than 40 percent of the families in the bottom half of the income distribution were in a retirement plan, compared with more than 80% of the upper middle-income families and more than 90% in the top decile of income.

Read the rest of Jeff MacLellan’s article here at the Columbia Daily Tribune