The Census Bureau's announcement that median household rose 5.2% marked the biggest annual gain on record. Income inequality eased as income grow fastest for lower-income households and the middle class grew more than the rich.
This shift could have hugely important implications for U.S. consumer spending, which accounts for a full 70% of GDP, and for retailers and other consumer-facing businesses.
The income gains for less affluent households probably continued in 2016. And, those paychecks tend to get spent. For most of these people additional income translates into additional spending.
Gains for middle and lower-income households look likely to continue, even if hiring moderates in the year ahead as the economy gets closer to full employment - wage growth ought to pick up steam.
GOOD NEWS FOR CONSUMERS; GOOD NEWS FOR THE COUNTRY