Rising prices on everything from groceries to gasoline have eaten away the wage gains workers have seen since the start of the year, leaving most Americans earning less than they were before the pandemic began and derailing the White House’s argument that paychecks have grown under President Joe Biden’s tenure.
Prices climbed 0.5 percent over the month from June to July, a slower pace than in recent months but still sizable enough that it outpaced the healthy wage gains workers across the income spectrum have received. As a result, real earnings decreased 0.1 percent over the month, government data shows.
The consumer price index, a key measure of inflation, rose 5.4 percent in July from the same month last year as the cost of meat and dairy products, hotel room stays, restaurant dinners and other items increased, according to Labor Department data released Wednesday. It's the second straight month of year-over-year increases at that level, the biggest jump since 2008.
The data marks the latest month in which rising prices have overshadowed wage gains, all but erasing the impact of pay hikes that have been celebrated from Biden on down as a sign of workers’ new bargaining power and of the robustness of the economic recovery.