Key facts
- Inflation has erased nearly all wage gains for the average US worker over the past two years.
- Average hourly wage was $37.81 last month, effectively unchanged from 20 months prior when adjusted for inflation.
- September CPI report showed prices up 3.7% year-over-year, higher than the expected 3.6% and August's 3.4%.
Inflation has significantly eroded the value of raises received by average US wage-earners over the past two years, according to recent data. The latest consumer price index report showed prices rose 3.7% year-over-year in September, exceeding expectations and continuing a trend that has outpaced wage growth. Average hourly pay, adjusted for inflation, has remained virtually unchanged over the last 20 months, returning to levels seen around January 2025. This persistent inflation, exacerbated by factors like rising gasoline prices and the conflict in Iran, is contributing to a general sense of economic frustration among households. While average annual earnings have shown some growth, the impact of higher costs for essentials like groceries and gas disproportionately affects middle- and lower-income households.