Top economist Justin Wolfers has warned of a growing "affordability crisis" as the newly released May CPI report reveals that "real wages" have been falling for six consecutive months, completely eroding worker gains in 2026.
Shocks Batter Paychecks According to Wolfers, the latest inflation surge is a direct result of two "unhelpful supply shocks": an escalating war pushing up energy costs and tariffs raising prices on everyday goods.
Because prices are rising faster than paychecks, the "purchasing power" of the typical American worker has flatlined, failing to rise a single penny since January 2025.
"Oil doesn't stay in your gas tank," Wolfers noted, warning that this energy shock is quickly morphing into a broader core-inflation problem.
Prices are rising faster than paychecks.Average wages haven't kept pace with inflation, which means the purchasing power of the typical paycheck has been falling.I explain what's driving it—and why the headlines are likely to get louder: https://t.co/kolre4RGsk pic.twitter.com/GYRWALlucx— Justin Wolfers (@JustinWolfers) June 10, 2026 Read Also: Inflation Is Back Above 4%: The ETF Strategy Wall Street May Revisit As Fed Risks Drift Higher Broad Economic Pain Other leading financial experts echo these anxieties.
