As the economy recovers from COVID-19 and the lockdown-induced recession, many Americans are bringing home nominally larger paychecks. However, soaring inflation is outpacing wage growth — eroding the purchasing power of American households.
According to data from the Bureau of Labor Statistics released on Wednesday, “real average hourly earnings” — which consider the effect of inflation — decreased by 2.4% from December 2020 to December 2021.
“In what was the best year for wage growth that we have seen in many, many years, it still comes up as a loss for many households,” Bankrate chief financial analyst Greg McBride told CNBC. “Their expenses increased even faster and chewed up all of the benefit of whatever pay raise they had seen.”
The agency also reported that consumer prices are