In addition to the solid increase in household income in 2015, the record number of higher-income households is a good sign for restaurants, according to the NRA’s Chief Economist Bruce Grindy. His Economist’s Notebook commentary and analysis appears regularly on Restaurant.org and Restaurant TrendMapper.
Household income registered a solid increase in 2015, according to new figures from the U.S. Census Bureau. Real median household income was $56,516 in 2015, up 5.2 percent from 2014 and the strongest annual increase since data reporting began back in 1967.
Despite the healthy gain, 2015 median household income remained 1.6 percent below its pre-recession high of $57,423 in 2007, and 2.4 percent below the record high of $57,909 in 1999.
In addition to the growth in median household income, the number of higher-income households rose sharply in 2015, which continued the positive post-recession trajectory. The number of households with annual income above $75,000 numbered 48.4 million in 2015 – the highest level on record. Moreover, there were 6.9 million more households with income above $75,000 in 2015 than there were in 2011, after adjusting for inflation.
The strong growth during the last four years followed a sharp decline in higher-income households during the Great Recession. Between 2007 and 2011, the number of households with annual income above $75,000 fell 5.2 percent, or 2.3 million households.
Higher-income households also make up a larger share of total households than they ever have. Households with income above $75,000 represented 38.5 percent of all households in 2015, which surpassed 2000 (38.1 percent) as the highest proportion on record.
Growth in the number of higher-income households is a positive sign for restaurants, as this demographic group represents the majority of spending in the industry. According to data from the Bureau of Labor Statistics, households with incomes of $100,000 or higher are responsible for 42 percent of the total spending on food away from home, while households with incomes between $70,000 and $99,999 account for 18 percent of industry spending.