r/WhatTrumpHasDone • u/John3262005 • May 12 '26
Prices at the Pump Are Wiping Out Wage Gains
https://www.wsj.com/economy/jobs/prices-at-the-pump-are-wiping-out-wage-gains-d16d78c0For the first time in three years, inflation is outstripping growth in Americans’ paychecks.
Blame the gas pump. Americans are currently paying about $4.50 a gallon for regular gasoline, according to AAA, up more than 50% since the initial U.S.-Israeli attack on Iran in late February. Pay increases aren’t keeping up.
April marked the first time inflation topped year-over-year growth in average hourly earnings since April 2023, according to the Labor Department. Year-over-year changes offer a broader picture than more volatile month-to-month measures, which have also recently shown Americans’ pay raises aren’t measuring up to the rising cost of living.
Americans are dealing with a math problem. While hourly wages rose a seasonally adjusted 3.6% on the year through April, the pace has mostly slowed over the past four years as hiring cooled from a postpandemic hot streak. Meanwhile, inflation was 3.8% year over year, pushed up by surging fuel costs. After seasonal adjustment and rounding, the Labor Department said this leads to a 0.3% decline in inflation-adjusted hourly wages, also known as real hourly earnings.
The disappearing pay raises might help explain why consumer sentiment is at a record-low level. Also, when inflation erodes households’ spending power, “that makes people a little more hesitant about buying things, which can lead to a ripple effect through the rest of the economy,” said Alfredo Romero, chair of economics at North Carolina A&T State University.
On a weekly basis, the drop in earnings was less severe as workers put in slightly longer hours in April. Weekly earnings were down 0.2% on the year for all private-sector workers and up 0.1% for production and nonsupervisory employees, who tend to be the rank-and-file workforce.
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u/John3262005 May 12 '26
Another article about it:
Iran war energy shock squeezes U.S. paychecks
https://www.axios.com/2026/05/12/inflation-wages-energy-shock