Inflation gave most Americans a 2.6% wage cut in April

The tightest labor market in decades is fueling rapid wage growth for millions of Americans, but sky-high inflation is quickly eroding those gains. 

The Labor Department reported on Wednesday that average hourly earnings for all employees actually declined 2.6% in April from the same month a year ago when factoring in the impact of rising consumer prices. On a monthly basis, average hourly earnings dropped 0.1% in March, when accounting for the inflation spike. 

By that measure, the typical U.S. worker is actually worse off today than they were a year ago, even though nominal wages are rising at the fastest pace in years. That's because consumers are confronting the highest inflation in a generation, which has quickly diminished their purchasing power.

"Rising wages are pushing overall inflation higher – and yet workers are still losing ground," said Rucha Vankudre, senior economist at Emsi Burning Glass. "Wages are increasing but not in real earnings for people."
Joe Biden by Lisa Ferdinando is licensed under CC BY 2.0

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