US Consumer Prices Rise 3.4% in August, Outpacing 3.1% Wage Growth
August inflation data showed consumer prices rising 3.4% year-over-year, while average hourly earnings increased only 3.1%, marking a reversal where wages previously outpaced price increases.
Consumer prices rose 3.4% in August compared to the same period last year, according to new Bureau of Labor Statistics data released Friday. Average hourly earnings grew just 3.1% during that month. When adjusted for inflation, real average hourly earnings fell 0.1% from July and were down 0.3% when compared to August of the previous year. This gap between price increases and wage growth squeezes purchasing power, a trend Heather Long, chief economist at Navy Federal Credit Union, described as inflation wiping out wage gains. From May 2023 until April of this year, workers had been gaining ground as their wages generally exceeded inflation. Currently, wage growth has cooled substantially from the pandemic era while inflation remains elevated. These factors add to economic pressure on households and have contributed to a stumble in stock markets due to inflation fears.
