Incomes fell in 7 major US cities in 2024—where Americans earned less

U.S. national median household income increased just over 1% between 2023 and 2024, but seven of the 50 largest U.S. cities saw declines, according to SmartAsset analysis of Census Bureau data. Minneapolis experienced the steepest drop at over 4%, with households with children seeing a notable 19% decrease, signaling localized economic pressures or demographic shifts. This divergence from the national trend indicates uneven financial stability across major urban centers, potentially impacting regional consumer spending and investment outlooks, even as some declining cities maintain incomes above the national median.

Analysis

While U.S. national median household income saw a modest increase of just over 1% between 2023 and 2024, a closer examination of Census Bureau data reveals significant economic divergence at the metropolitan level. Seven of the 50 largest U.S. cities experienced a decline in median household income, with Minneapolis registering the most severe drop of over 4% to $77,732. The situation in Minneapolis is particularly acute for households with children, where median incomes plummeted by over 19%, a trend that may signal either localized wage pressure or demographic shifts such as divorce or changes in workforce participation. It is notable that some cities experiencing income declines, including Denver, Seattle, and Austin, still maintain median incomes well above the national median of $82,690. This suggests that high-income urban areas are not immune to volatility, a phenomenon attributed to dynamic local economies and demographic changes. Furthermore, several other major cities, including Philadelphia (0.36%) and Boston (0.89%), exhibited income growth that significantly lagged the national rate, underscoring a fragmented economic landscape that poses varied risks and opportunities for geographically-focused investments.

Key Decisions for Investors

• Investors should review portfolio exposure to consumer discretionary and retail sectors in cities with declining or stagnating income growth, such as Minneapolis, Philadelphia, and Boston, as these trends may signal headwinds for local consumer spending.
• The sharp 19% income drop for families in Minneapolis warrants caution for investments tied to the local housing market and family-oriented services, as it could impact affordability and demand.
• Consider the divergent economic performance across U.S. cities as a factor in asset allocation, favoring regions with robust income growth and exercising greater due diligence on real estate and municipal bond investments in the identified underperforming metropolitan areas.
• Recognize that headline income data can be influenced by demographic shifts, not just wage trends, and therefore look for corroborating economic indicators before making significant allocation changes based on this single data point.