American households' median income rose by a paltry $1,040 in 2024 — but will 2025 deliver the kind of bump families can actually feel?

Of course, those scenarios assume household income has kept up with the cost of living. For families whose costs have risen faster than wages, that $86 may get swallowed immediately by rent, groceries, or utilities. In those cases, the best move is defensive: Things like renegotiating car insurance rates, scrutinizing your grocery bills and dropping at least some discretionary spending (such as streaming TV services) could put some of that money back in your pocket.

Will 2025 deliver another bump — or take it back?

It’s important to remember that the new income numbers are a reflection of 2024, while 2025 could paint a completely different picture thanks in large part, experts say, to the new administration.

“Trump policies — chaotic and high tariffs, mass deportations, attacks on the federal workforce — have already led to a softening labor market and more inflationary pressures,” Elise Gould, senior economist at the Economic Policy Institute, posted to Bluesky. (1)

After a period of cooling, inflation has accelerated and was up 2.9% year-over-year as of August. At the same time, a poor job market means worker leverage may fade, making broad-based wage acceleration less likely. The Fed, however, is widely expected to cut rates, which could support growth later. The result? Income gains in 2025 may be smaller and depend on whether inflation cools again.

If you’re feeling uneasy about today’s economy, you may want to think about using whatever employment raise you’ve gotten as a force-multiplier: put it to use, trim one stubborn bill and route the rest to savings or debt reduction. In a year like this, a win may be keeping a small gain from turning into a loss.

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@elisegould (1)