Inflation Outpaces Pay, Eroding Americans’ Purchasing Power and Confidence

Despite a growing economy and low unemployment, inflation has outpaced wage growth for four straight months, eroding purchasing power and dampening consumer sentiment. A University of Michigan survey shows most Americans expect prices to rise faster than income, and a Chicago Booth/ADP study finds real wages fell for about 40% of workers between 2020 and 2024, with bonuses offering little relief. The result is persistent economic unease even as growth and jobs remain positive.