Is Trump right that Americans' incomes have risen $7,000 since he took office?

• President Trump claims the typical U.S. household has enjoyed a $7,000 increase in income since he took office.
• Federal data show that the income gains are less substantial than what the White House is claiming.
• Mr. Trump included "gains" from lower income taxes, but most families saw only a modest boost from the Tax Cuts and Jobs Act, and any benefit has since been eaten up by the Trump administration's tariffs.

President Donald Trump on Monday boasted that Americans are doing much better financially since he took office — $7,000 better. "We've had many records since we won office," he said in a recent cabinet meeting, according to a White House transcript. "The household median income for eight years of President Bush, it rose $400.  For eight years of President Obama, it rose $975. And for two and half years of President Trump — they have it down as two and a half years — it rose $5,000, not including $2,000 for taxes. So it rose, let's say, $7,000."

In fact, the picture for most Americans is somewhat less rosy than Mr. Trump would have it. People's incomes are indeed rising, but the increase is more modest than he suggests. On top of that, Mr. Trump's tariffs on Chinese imports are adding $800 in annual costs for each American household, according to the Federal Reserve of New York. That's about what the typical household got in tax breaks under the 2017 Tax Cuts and Jobs Act, experts have found. In effect, the tariffs wiped out the modest tax breaks many families received. 

So what about income gains? 

Annual data released by the Census last month found that recent gains are small: The median family had income of $63,179 in 2018, not statistically different from the 2017 median. To be sure, income growth has been elusive for two decades, with the Census data finding that Americans are earning only 2.7% more than they did in 1999 once inflation is factored in.

Tax data analyzed by economists Emmanuel Saez and Gabriel Zucman of University of California at Berkeley also shows more modest gains for middle-income households. Their analysis finds that the middle 40% of households — middle-class families — saw their pre-tax income rise 2% to $73,582 in 2018. 

Even so, more recent data suggest that Americans are seeing stronger income growth. The typical household saw its annual income rise from $60,973 in January 2017 — when Mr. Trump was inaugurated — to $65,976 in August 2019, according to recent research from Sentier Research. That's a gain of about $5,000 during the past two and a half years. 

"Economy is doing very well"

So what accounts for the difference between the Census and the data from Sentier, a well-known research firm that specializes in analyzing household income and worker earnings? For one, Sentier is using monthly data, which captures more variation than the Census's annual average. Secondly, Sentier adjusted its data to reflect 2019 dollars, which would make the figures slightly higher than the Census's reported data. 

Lastly, roughly a third of the $5,000 boost came during the first eight months of 2019, a period that the Census data doesn't reflect.

"What we've seen is the economy is doing very well," said Gordon Green of Sentier Research. "The economy is healthy, the labor market is very tight. There have been wage gains. What we are showing is reflecting what is going on in the overall economy."

Green, a former Census official, said his research firm is strictly non-partisan, and declined to comment on whether Mr. Trump's policies or an ongoing economic recovery are boosting household incomes. As for which data should be examined to get an accurate sense of household income gains, Green said, "People should look at both."

"The numbers from the Census Bureau are the official government numbers, but they are what is happening in the past," he said. "Our numbers bring you up to date currently."