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Price and Index Number Research
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2023 Research Supplemental Poverty Measure Thresholds
The Division of Price and Index Number Research (DPINR), U.S. Bureau of Labor Statistics (BLS), finalized the 2023 Research Supplemental Poverty Measure (SPM) thresholds on May 13th, 2024. These thresholds incorporate the changes approved by the ITWG SPM on September 30, 2020. The changes are described on the main DPINR SPM webpage. SPM thresholds are used by the Census Bureau in combination with SPM resources to produce SPM poverty statistics. The SPM is meant to provide a complementary perspective for examining poverty and is not designed to replace the official poverty measure. Both SPM and official poverty statistics are produced by the Census Bureau.
As seen in Chart 1, the 2023 SPM thresholds for consumer units with two adults and two children are $37,482 for renters, $36,915 for owners with mortgages, and $30,870 for owners without mortgages, as compared to the official poverty threshold of $30,900 (for two adults two children). The thresholds for owners with mortgages and renters are not statistically significantly different, this has been true since the beginning of the series in 2005. In contrast, the threshold for owners without mortgages is statistically significantly different from both thresholds for owners with mortgages and rents at the 0.1 percent level, which suggests a high level of statistical confidence in this result. The thresholds for owners without mortgages have been statistically different from the thresholds for the other housing tenure groups since the beginning of the series in 2005.
Chart 2 shows how the 2023 SPM thresholds compare to the 2022 thresholds. For all three housing tenure groups, the 2023 thresholds are higher than those for 2022. When compared in threshold year dollars, the 2023 thresholds for all tenure groups are statistically significantly different than the 2022 thresholds at the 0.01 percent level.
Since the 2019 (revised) thresholds were published, the year-over-year change in the thresholds has consistently been statistically significant. However, the change in the thresholds in 2023 are larger than usual. Chart 3 shows the year-over-year change in the thresholds from 2010 through 2023. For results before 2022, the 2021 historic series is used to hold the methodology constant. The 2023 thresholds increased 6.78-8.59 percent, which is lower than the 9.74-10.05 percent increase seen in 2022, but still higher than the 2-4 percent annual increases from 2016 to 2021.
Analysis of the change between the 2021 and 2022 thresholds showed the large increase was primarily due to the high inflation rate in 2022. For the complete analysis, read Decoding the surge in the 2022 SPM Threshold: The influence of Inflation and Other Factors. The SPM uses 5 years of Consumer Expenditures data which are lagged by one year, so all data needs to be adjusted for inflation to produce an interpretable value for the threshold year. Chart 4 below shows the year-over-year inflation rate for the FCSUti as well as the CPI-U inflation rate.[i] Though annual FCSUti inflation fell to 6.17 percent in 2023 from its peak of 7.21 percent in 2022 it remains well above the level seen in previous years (1.79-3.17 percent between 2011 and 2021). The persistence of above average inflation is a core contributor to the above average increase in the 2023 thresholds.
The SPM is a work in progress and is expected to incorporate improvements over time, like those introduced with the production of the 2019 (revised) and 2020 thresholds, published in September 2021. Other than the inclusion of in-kind broadband subsidy offered as part of the Affordable Connectivity Program, the 2023 SPM thresholds and statistics follow the same methodology as the 2022 SPM thresholds.
Last Modified Date: September 19, 2024
[i] FCSUti inflation fell less from its 2023 peak than CPI-U inflation in large part due to the higher weighting of shelter inflation in FCSUti figures.