And in new signs of distress among the middle class median household incomes fell last year to levels last seen in 1997.
Economists seized on a telling statistic: It was the first time since the Great Depression that the median US household had a lower income, adjusted for inflation, than 13 years earlier, said Lawrence Katz, an economics professor at Harvard University.
"This is truly a lost decade," Katz said. "We think of America as a place where every generation is doing better, but we're looking at a period when the median family is in worse shape than it was in the late 1990s."
The bureau's findings were worse than many economists expected, and brought into sharp relief the toll the past decade - including the sharp declines of the financial crisis and recession had taken on Americans at the middle and lower parts of the income ladder.
The report comes as President Barack Obama gears up to try to pass a jobs bill, and analysts said the bleak numbers could help him make his case for urgency. But they could also be used against him by Republican opponents seeking to highlight economic shortcomings on his watch as the election season gets under way. "This is one more piece of bad news on the economy," said Ron Haskins, a director of the Center on Children and Families at the Brookings Institution. "This will be another cross to bear by the administration."
The past decade was also marked by a growing gap between the very top and very bottom of the income ladder. Median household income for the bottom tenth of the income spectrum fell by 12 per cent from a peak in 1999, while the top tenth's income dropped by just 1.5 per cent.
The census report said that the per centage of Americans living below the poverty line last year, 15.1 per cent, was the highest level since 1993 (the poverty line in 2010 for a family of four was $22,314).
And this year is not likely to be any better, economists said. Stimulus money has largely ended, and state and local governments have made deep cuts to staff and to budgets for social programs, both likely to move economically fragile families closer to poverty.
Minorities were hit hardest. Blacks experienced the highest poverty rate, at 27 per cent, up from 25 per cent in 2009, and Hispanics rose to 26 per cent from 25 per cent. For whites, 9.9 per cent lived in poverty, up from 9.4 per cent in 2009. Asians were unchanged at 12.1 per cent.
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