By Lucia Mutikani and Susan Heavey
WASHINGTON (Reuters) - U.S. household income posted a record increase in 2015 after years of stagnation, suggesting the recovery from the Great Recession was finally lifting ordinary citizens who had been largely left behind.
The Census Bureau said on Tuesday that median household income surged 5.2 percent last year to $56,500, the highest since 2007, in large part due to solid employment gains. The jump was the biggest since record keeping began in 1968.
Trudi Renwick, an assistant division chief at the Census Bureau, said on a conference call with reporters it was striking that median household income rose across the board. "It's up for almost every age group of household heads. It's up for almost every racial group," except Asians, she said.
Concerns about income growth have hung over the U.S. presidential election, with many Americans expressing dissatisfaction with an economy that has managed only sluggish expansion since the 2007-2009 recession.
President Barack Obama hailed the report as evidence that his administration's economic policies were paying off, but said more needed to be done to put unemployed Americans back to work.
"The Republicans don't like to hear good news right now. But it's important just to understand this is a big deal," Obama in Philadelphia, where he was campaigning for the Democratic Party's presidential candidate Hillary Clinton.
"For every family who hasn't yet felt progress these past eight years, we've got more work to do - we know that. And the choice that you make, that we make, just eight weeks from today will determine the direction of this country for a long time."
But House Republicans, who are pushing their own agenda to tackle poverty and other issues, rejected the report's positive view. House Ways and Means Committee Chairman Kevin Brady, noting that more than 43 million Americans were impoverished, called the findings "another disappointing confirmation" of the nation's struggles.
Although the economy exited recession seven years ago and the stock market has been booming, millions of Americans appeared not to have been part of the recovery. While median income remained below where it stood prior to the recession, the Census Bureau data suggested the tide was turning.
FURTHER GAINS EXPECTED
Chris Christopher, head of consumer economics for IHS Global Insight, said he expected incomes to continue to gain ground through 2017 with higher employment and modest inflation. The unemployment rate has declined from a peak of 10 percent in October 2009 to 4.9 percent last month.
With incomes rising, the number of people living in poverty fell 3.5 million to 43.1 million last year. That pushed the 2015 poverty rate down to 13.5 percent from 14.8 percent in 2014.
The poverty rate has continued to edge down since hitting a 17-year high in 2010. The latest drop is the largest percentage point decline since 1999, Census officials said.
In another encouraging sign, the number of residents without health insurance dropped to 29 million last year from 33 million in 2014. Nearly 91 percent of people in the United States had health coverage, up from 89.6 percent the previous year.
"The three key indicators of well-being ... all moved decisively in the right direction in 2015 - the first time that has occurred in nearly two decades," said Robert Greenstein, president of the left-leaning Center on Budget and Policy Priorities.
An alternative measure of poverty that takes into account non-cash benefits, including food stamps and refundable tax credits, fell one-tenth of a percentage point to 14.3 percent.
Analysts cautioned against reading too much into this still-high supplemental poverty rate because it reflects the withdrawal of generous benefits put in place during and immediately after the recession to cushion families.
Women working full-time saw a boost in earnings last year, with the median income rising 2.7 percent to $40,742. The median income for men working full-time increased 1.5 percent to $51,212. The gains for both genders were the biggest since 2009.
Despite the broad-based gains, there was little progress in reducing income inequality.
"Economic recovery finally started arriving for tens of millions of American families over the past year. We should make sure the economy is nurtured going forward, and not subverted by bad policy decisions," said Elise Gould, a senior economist at the Economic Policy Institute in Washington.
(Reporting by Lucia Mutikani and Susan Heavey; Editing by Cynthia Osterman and Dan Grebler)