For years, many Americans have wondered why their paychecks aren’t keeping up with the spiraling cost of things they need to buy.
Even as many economists acknowledged an "affordability crisis" and a "K-shaped economy" that benefitted the super-wealthy, analysts fixated on a more traditional measure of success: across the entire economy, aggregate wages were not too far behind aggregate inflation.
As recently as last summer, a report from Bankrate predicted that the gap between wages and inflation – which stood as wide as 4.8 percentage points in 2022, would finally close in 2026.
A hiring slowdown and, more recently, the Iran war, have shut down that speculation.
"We're not going to see a huge acceleration in wage growth," Bankrate Senior Economic Analyst Mark Hamrick told USA TODAY. "But we are going to see an acceleration of inflation."
