U.S. Consumers Take 0.2% Real Pay Cut as Inflation Tops 3.2% Wage Growth
Updated
Updated · Marketplace · Aug 12
U.S. Consumers Take 0.2% Real Pay Cut as Inflation Tops 3.2% Wage Growth
3 articles · Updated · Marketplace · Aug 12
Summary
July inflation rose 3.4% from a year earlier, edging past 3.2% average hourly earnings growth and extending the drop in Americans’ real purchasing power.
Oil and other commodity gains have kept price pressures elevated, while last week’s jobs report showed a 23,000 payroll decline and the slowest wage growth in five years.
Households are responding by dipping into savings, taking on debt for essentials such as groceries, medical bills and car repairs, and trading down on spending.
Higher-income consumers with large stock portfolios are still spending, which could prop up overall retail data even as much of the country feels squeezed.