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American wages are not keeping up with inflation. US average hourly earnings adjusted for inflation fell -0.3% YoY in September, marking the 5th consecutive decline in real wages. This follows a -0.2% YoY decrease in August, -0.3% in July, and -0.8% in June, the largest decline since May 2023. This marks a sharp deterioration from +1.3% YoY growth in real wages recorded in February. This all comes as US CPI inflation has remained above +3.0% for 6 consecutive months, the longest such streak since mid-2024. Meanwhile, in nominal terms, average hourly earnings rose +3.0% YoY in September, their slowest growth since May 2021. Nominal wage growth has been in a downtrend since March 2025, when earnings grew +4.2% YoY. Inflation is eroding the spending power of Americans.

The financial pain is real: Wage growth fell to 3% (y/y) in September. That's the lowest in 5 years. Wage growth: 3% Inflation: ~3.4% Inflation has eaten up all wage gains for the average worker since April. Many people are having to make hard choices about what to buy and what to skimp on right now. Yes, consumption is still strong (mainly due to wealthier Americans and people dipping into savings or credit cards), but a lot of people have to think hard about every dollar they spend. Notable: Wages only ticked up 0.1% in the month of September. That was the weakest monthly gain since December 2025.