The widespread perception that US middle-class incomes have stagnated for decades contributed to the force of populism in the 2016 presidential election. If the recent Democratic party presidential debates are anything to go by, the same thing will happen again next year. Yet a clear-eyed look at the statistics shows that it is a mistake to judge that American capitalism is broken.

Leading candidate Bernie Sanders cites declines of $5,000 in inflation-adjusted median household income since 1999-2000, based on the 2014 census data available during the 2016 election.

However, the picture is far better when a different price index is used, the trend towards smaller households is taken into account, and we look at long-term trends rather than the unusually high starting point of 1999 and use more recent 2017 data.