Americans have experienced barely any growth in their purchasing power over the past year as inflation continues to offset wage increases. Real average hourly earnings rose only marginally, just 0.1% year over year, according to the U.S. Bureau of Labor Statistics (BLS). This minimal gain comes despite nominal wages increasing by 0.3% in June, revealing that rising prices have largely neutralized wage growth.
Looking deeper, while real average weekly earnings edged up 0.3%, workers without supervisory roles actually saw a slight decline in real hourly earnings by 0.1%. A slight lengthening of the average workweek helped lift their weekly pay despite falling real hourly rates. The overall rise in nominal wages has not kept pace with inflation, which remains elevated. Though the Consumer Price Index (CPI) dropped 0.4% in June—the largest monthly decrease since early 2020—prices still stood 3.5% higher than a year earlier.
This persistent inflation has kept many workers’ paychecks from translating into real gains. Energy prices declined significantly in June, helping lower the monthly CPI, but the slow wage growth was insufficient to substantially boost workers’ purchasing power after prolonged price increases. For lower-wage earners, small increases in work hours have made more difference than pay raises, highlighting how economic relief remains uneven across the workforce.
The discrepancy between expected and actual wage growth has become a point of contention in political circles. The White House earlier projected a 4% rise in real private-sector weekly earnings in President Trump’s first full year in office. Yet the latest BLS data show increases far below that, with rank-and-file workers’ inflation-adjusted pay remaining virtually flat since early 2025.
Research from think tanks and media outlets supports this picture. The Center for American Progress noted in May 2026 that inflation had effectively erased recent wage growth, leaving workers’ real earnings close to levels from over a year ago. This explains why many Americans report that pay raises have not translated into better financial security, as rising costs in essentials like food, housing, insurance, and credit continue to absorb most gains.