Finally, the Curves Flip on Paychecks, Inflation

After 2 years, wages hikes are finally rising faster than inflation
By John Johnson,  Newser Staff
Posted Jul 17, 2023 7:28 AM CDT
Finally, Pay Is Rising Faster Than Inflation
   (Getty / Karen Poghosyan)

Generally speaking, Americans have been getting pay raises over the last two years—it just hasn't felt like it because prices were rising even more. Finally, however, wage increases have begun to outpace inflation, reports the Wall Street Journal. Average hourly wages, after being adjusted for inflation, rose 1.2% in June. It's the second straight month of being in positive territory, and June's numbers reinforce the idea that the May increase wasn't a fluke. NBC News provides some context: In June 2022, real average hourly earnings declined by 3.2%. NBC also notes that the June increase was even greater for workers in non-supervisory roles: 2.2%.

"If the trend persists, it gives Americans leeway to propel the economy through increased spending, which could help the (US) skirt a recession," per the Journal. But what sounds like good news isn't necessarily so for the Federal Reserve, which worries about wages rising too quickly, per CNN. Here is how Fed chief Jerome Powell put it in June: "It's great to see wage increases, particularly for people at the lower end of the income spectrum, but we want that as part of the process of getting inflation back down to 2%, which benefits everyone." Inflation is currently running at 3%. The Fed meets again next week, and the central bank is widely expected to raise rates again as part of its attempt to hit that 2% target, per Reuters. (More inflation stories.)

Get the news faster.
Tap to install our app.
Install the Newser News app
in two easy steps:
1. Tap in your navigation bar.
2. Tap to Add to Home Screen.