American Incomes Hit A Record High

Trump administration officials defend the president's policies to Congress. Plus, in a blow to the crypto industry, a landmark bill falls short during a procedural vote in the Senate. While the biggest hurdles for the bill over the past few months has been the Essex language, and new census data show that American incomes reached a record last year. It's Tuesday, September 15th. I'm Alex O'Solev for the Wall Street Journal. This is the PM edition of "What's News," the top headlines and business stories that move the world today. Congress is back in session, with the Senate returning yesterday from its summer recess. And two members of the Trump administration appeared before lawmakers today. FBI Director Cash Patel sat before the Senate Judiciary Committee for an oversight hearing today. The lawmakers grilled him on changes to the FBI hiring rules and the agency's role at poll sites for the midterms. Meanwhile, Treasury Secretary Scott Bessent spoke to members of the House Financial Services Committee. Lawmakers grilled him on whether his recent intervention in the Treasury bond market worked. Bessent said that his intervention was successful, because even though yields remain high, they might have climbed even higher without the Treasury Department's ramped up buyback plan. The U.S. bond market, it continues, during past month, since President Trump has come in, there has been the best performing bond market in the developed world. Bessent was also asked about President Trump's plan to pay each adult citizen $5,000 if Republicans retain control of the House and Senate. He called Trump's plan, quote, "very real." And this week's chatter on AI's existential threat also bled into questioning. Bessent said the Treasury Department has been focused on AI safety since the limited release of anthropics mythos models, and that he hadn't yet seen any AI regulation he would support following the recent hugging face hack. The Pentagon spent about $38 billion in its first few months of the war with Iran, and it will need at least five years to replace the missile interceptors used in the conflict. That's according to the Congressional Budget Office, a nonpartisan Congressional watchdog. It also estimated that the war is likely to cost an additional $2 to $3 billion a month, as President Trump tries to figure out the next steps in the conflict. The Pentagon's chief spokesman said claims of U.S. munition shortages are false. And the board for the Kennedy Center voted today to immediately close the venue's main building for renovations. That's according to people familiar with the matter, and per court filings, the work is expected to take two years and cost $285 million. The board said that the building is in such disrepair that it's endangering visitors and employees, and that the consulting group hired for the renovation had recommended the closure. Trump said in a social media post afterwards that the venue will close immediately, but that the renovation can't begin until an appeals court rules on the board's approved name for the center. He signaled plans to go to the Supreme Court if he loses. The move comes just a few hours after a federal judge blocked President Trump's name from going back on the Kennedy Center building, saying that it violated an earlier ruling that only Congress has the authority to rename the institution. In more news out of Washington, a landmark cryptocurrency bill has failed to advance in Congress. The Clarity Act already passed the House last year, but it fell short in a procedural vote in the Senate today that required the approval of 60 senators. The bill was expected to establish the first comprehensive regulatory framework for digital assets. It had been under negotiation for more than a year, but a major sticking point ended up being the ethics rules, and whether the bill should restrict President Trump from profiting off the industry, he made more than $1.4 billion from his crypto ventures last year. Journal reporter Vicki Gohwang who covers the crypto industry says today's failed vote doesn't mean the bill is dead. Senators could refile for this bill to be brought back in a couple of days. However, all the crypto industry lobbyists and people in DC that I've talked to the odds of this bill being resurrected in 26 are very low. However, at least for the short term, a lot of industry insiders say that the crypto sector is positioned for stability because the SEC has proposed some rules for how startups can raise money through tokens, the CFTC chairman Mike Selik has also said that the agency has direct his staff to draft rules for crypto market structure, but the industry definitely prefers permanent rules, which would have been able to be codified by the Clarity Act. The vote rippled through the crypto industry. Coinbase fell 10%, Robinhood 3.4%, and Circle Internet Group 11.4%. Bitcoin itself recently traded below $76,000, down about 4% from its 4PM price on Monday. Coming up, American incomes hit a record high last year, so why don't millions of Americans feel any richer? After the break. Stocks fell today for the sixth time in the past seven sessions. Among the major indexes, the NASDAQ led losses falling 0.8%. The Dow lost 0.6%, and the S&P dropped almost half a percent. The 10-year treasury yield rose as high as 5.04%, before closing just under 5%. The move largely tracked oil prices, with Brent crude taking 2.9% higher to $108.75. Together, the moves have dialed up the pressure on the Federal Reserve ahead of tomorrow's interest rate decision. According to CME Group Data, investors now see a 94% chance that officials hike rates by a quarter percentage point. Meanwhile, mortgages are closing in on 7%. Rates are approaching their highest since January 2025, which will likely spook home buyers and builders even more. This year's run-up in mortgage rates, driven primarily by the war in Iran, has knee-capped a housing market that is now well into its fourth year of stagnant sales. The annual census report out today on households' financial well-being showed that American incomes reached a record high last year. Meeting household income reached just under $87,500 in 2025. That's up 2.6% from 2024 after adjustment for inflation, and tops its peak hit just before the pandemic. WSJ Economics reporter Rachel Wolfe joins me now to unpack the report. Rachel, I think this conclusion that incomes reached these records would surprise a lot of people who don't really feel all that well off, where the gains felt across the board. What's funny about this data is that it's telling us about 2025, so it can be a little bit tough for us to back up to then. This is before the war led to higher gas prices, before higher inflation of this year. What we did see in 2025 was that finally income reached a threshold that was above this pre-pandemic peak. But it was not evenly felt, and so you really saw most of the gains in the upper part of the income spectrum. Lower income households actually really didn't budge at all. That K-shaped economy yet again. Exactly. It keeps coming up. However, we did also see some other groups see pay gains, women and black Americans saw pretty substantial ones. Does the report explain why? It doesn't. That's the funny thing about this census data is it does not give us a lot of context, so even though a lot of the income gains were felt at the upper end of the income distribution, we also saw typically more marginalized groups, including black workers, including women, some really big gains. Black Americans tend to lag other groups when it comes to recovery from recessionary periods like the pandemic, and so what One Economist I spoke to said is that, finally, black Americans have regained some ground after a tougher period. For women, we saw a pretty significant narrowing of the pay gap between women and men, and what's going on here is that the vast majority of job creation is in roles that are held by women, and so finally, we're starting to see that show up in the data, where all of these more AI proof careers and health care are held by women, mostly, and we're starting to see that show up, whereas men are struggling more in the labor force. So this data is, as you mentioned from last year, how has Americans' financial picture changed since then? We're in kind of a funny economy right now, where you have a labor market that's okay. You have inflation, that's higher than it should be, but not terrible. And you have a really strong and widening bifurcation in the economy, where if you are on the upper end of the ankle spectrum, if you own a home or you have stocks, you're likely doing quite well. If you don't have a job, if you don't have assets, that's a totally different picture. 2025 was part of that. It's just a precursor to a lot of what we're seeing today. That was WSJ Economics reporter Rachel Wolf. Thank you, Rachel. Thank you so much. And in international news, China has tightened its exit restrictions for citizens and imposed new rules for foreigners entering the country. The measures allow the government to stop citizens from leaving the country for months or years if they participate in activities that threaten national interests. They come alongside more beefed up export controls. The latest sign that Chinese leader Xi Jinping is focused on national security and curbing the flow of talent in a tech race with the U.S. And Canadian Prime Minister Mark Carney unveiled a new plan to lower the effective tax rate, in my country. more attractive for businesses to invest. With the productivity mega deduction, as it's called, the government will allow for immediate expensing for a wide range of assets that will enable taxpayers to fully write off the cost of an investment in the year that it becomes available for use. The Canadian government describes the change as one of the most significant to the country's business tax system in half a century. And it comes at a time when Canada is faced with a tough trade environment and tariffs on exports to the US. Before we go, heads up, we've made a correction to this morning's episode. Nathan Fielder is the creator of the HBO series The rehearsal. We incorrectly said he was the creator of The Audition. And that's what's news for this Tuesday afternoon. Today's show is produced by Anthony Bansy and Danny Lewis with supervising producer Katie Ferguson. I'm Alex O'Sulliff for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening. (gentle music)