Wage growth has been slowing down in recent months, but according to last month’s jobs report, it’s still been tracking ahead of the rate of inflation for the last year.
As of May, average wages had risen about 4% over 12 months, while the consumer price index showed inflation at 3.3% over the same period. That means workers’ spending power should be improving, yet measures of how people feel about the economy aren’t totally reflecting that.
Consumer sentiment hit a seven-month low in early June. And survey after survey have shown Americans feeling a bit pessimistic about the economy.
You can think of workers’ spending power as a horse race between wages and inflation, said Bankrate analyst Sarah Foster.
Out of the gate in 2021, “this inflation horse started running a lot faster,” she said. But “now wages are running a lot faster…
