Real Wages Of Americans Fell 4.4% Over The Last Year

The real wages of Americans continued to fall last month as inflation hit a new record high of 9.1%, according to a new report from the Bureau of Labor Statistics.

“Real average hourly earnings for all employees decreased 1.0 percent from May to June,” the report states. “This result stems from an increase of 0.3 percent in average hourly earnings combined with an increase of 1.3 percent in the Consumer Price Index for All Urban Consumers (CPI-U).”

Over the last year, real wages dropped significantly as the Biden administration failed to control the worsening inflation crisis.

“Real average hourly earnings decreased 3.6 percent, seasonally adjusted, from June 2021 to June 2022,” the report states. “The change in real average hourly earnings combined with a decrease of 0.9 percent in the average workweek resulted in a 4.4-percent decrease in real average weekly earnings over this period.”

The news comes as inflation reached a rate of 9.1% in June, higher than economists expected and the highest rate since November 1981.

“[The Consumer Price Index (CPI)] delivered another shock, and as painful as June’s higher number is, equally as bad is the broadening sources of inflation,” said Robert Frick, corporate economist at Navy Federal Credit Union, according to CNBC. “Though CPI’s spike is led by energy and food prices, which are largely global problems, prices continue to mount for domestic goods and services, from shelter to autos to apparel.”

The worsening inflation rate could push the Federal Reserve to further increase interest rates, raising the likelihood of an upcoming recession.

“U.S. inflation is above 9%, but it is the breadth of the price pressures that is really concerning for the Federal Reserve.” said James Knightley, ING’s chief international economist. “With supply conditions showing little sign of improvement the onus is the on the Fed to hit the brakes via higher rates to allow demand to better match supply conditions. The recession threat is rising.”