From CNBC: 2024-06-18 09:45:09

Americans have seen their buying power rise for a year with falling inflation and a strong job market. The average private sector worker’s real hourly earnings grew 0.8% from May 2023 to May 2024, after adjusting for inflation. This marks a positive trend in real wage growth for working families.

Real earnings measure the net growth in workers’ wages after inflation. The trend of growth in annual real earnings has continued since May 2023, especially for non-managerial workers. This is a reversal from the inflation spike between April 2021 to April 2023, where wages fell behind.

Inflation surged during the pandemic era, reaching a four-decade high by mid-2022. The labor market boomed with record job openings and low unemployment rates. Despite average worker raises in 2022 exceeding pre-pandemic levels, inflation prevented real wage growth until recently.

Nominal pay for all workers has increased almost 23% to $34.91 an hour since January 2020, further growing for rank-and-file employees. The consumer price index has only risen 21% in the same timeframe. Despite economic strength, workers remain pessimistic, leading to what experts call a “vibe-cession.”

Read more: American households have seen their purchasing power increase