The Pew Charitable Trusts

The long arm of the American economy -- in its ninth year of growth -- has now reached into millions more households, boosting incomes and reducing poverty among all racial groups and particularly among the most vulnerable -- children and the elderly, the Census Bureau reported Tuesday.

Nationally, the poverty rate fell last year to its lowest level since 1979, to 11.8 percent of the population or 32.3 million people. As a result, about 2.2 million Americans were no longer considered poor.

It was the third year in a row of significant declines in poverty, a phenomenon not experienced in at least two decades.

And, for the fifth straight year, incomes grew faster than inflation. Median household income -- the point at which half of families bring in more money and half bring in less -- rose more than $1,000 in 1999 to $40,800, the highest level ever recorded.

For African-Americans and Hispanics, household incomes made unprecedented jumps and poverty rates dropped to the lowest levels on record, although members of these groups are three times more likely to be poor than whites.

"This is the first year since 1969 that we have observed significant declines in the poverty rate for all racial groups," said Joe Dalaker of the Census Bureau, a division of the U.S. Department of Commerce.

The Census Bureau defines poverty as income of less $17,029 a year for a family of four, and less than $13,290 for a family of three.

Among the elderly, poverty fell to 9.7 percent, another record low. And, with 1.4 million children no longer considered poor, the child poverty rate took its biggest one-year dive since 1966.

The data left the White House crowing. "The rising tide of the economy is lifting all boats," Bill Clinton said Tuesday, as he urged Congress to pass his budget and defended his recent vetoes of Republican tax cuts. "If we stay on the path that got us here, the path of fiscal discipline, we can reach even greater heights of prosperity."

Seven states and the District of Columbia witnessed a significant decline in poverty in 1999: Arizona, Arkansas, California, New York, South Dakota, Utah and Virginia.

Washington, D.C. and fourteen states saw median incomes rise significantly: Arizona, California, Florida, Illinois, Iowa, Maine, Michigan, New York, Rhode Island, South Dakota, Tennessee, Texas, Vermont and Wisconsin.

Advocates for the poor reacted very enthusiastically to the news, citing low unemployment, welfare's new work requirements and tax credits for the working poor as key reasons for the drop in poverty.

Low unemployment is the biggest factor, says Kathy Porter of the Center on Budget and Policy Priorities in Washington. "In this very good economy, pretty much anyone can get a job."

But Porter cautioned that some groups still run particularly high risks of being poor. Children under six are the nation's most vulnerable. Of young children living with single mothers without husbands, half -- 50.3 percent -- grow up in poverty. Child poverty in the United States remains higher than that of Canada and most western European nations.

African-American and Hispanic poverty rates hover around 23 percent. More than one out of five still live in poverty.

The Census Bureau annual reports on income and poverty are drawn from surveys of 50,000 households conducted every March.