On Tuesday we were informed inflation decelerated An annual rate of 6.4% was set in January, a decrease from 6.5% in December.
The total rise in inflation since December 2019 is 16.2%. In comparison, overall inflation increased 18.75% during the entire decade 2010.
This means that if a given worker hasn’t seen their income rise at least 16.2% since December 2019, in economic terms at least, their “real” The wages are falling. This is a loss for most Americans. a A significant portion of the country’s purchasing power. It’s also why some workers feel like they’re falling behind even as raises keep rolling in.
What percentage of Americans are in this category? It’s a lot.
Lida Weinstock is a macroeconomic policy analyst. She recently published in a Service for congressional research report Real wages or inflation adjusted wages have seen a decline in real wages since 2021. That’s despite nominal wages (i.e. The increase in wages that haven’t been adjusted for inflation has reached 13.4% over the same period.
However “real” wage declines might be bad news for Americans’ short-term budgets, it could be Observed as positive news by the Fed
“Negative real wage growth might slow down demand for goods and services and could potentially help the Fed with cooling down the economy in the coming months,” The Sunday Review speaks with Sinem Buber, ZipRecruiter’s lead economist.
Why? It could be a sign of the beginning of wage growth if it were to increase significantly. a The wage-price spiral is a result of wage growth and higher demand. a Inflation continues to rise due to a feedback loop.
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