Inflation is outpacing wage growth again, squeezing Americans’ paychecks

JUST IN: US inflation outpaces wage growth again, with consumer prices up 3.4% in August against just 3.1% wage growth, squeezing American paychecks.

Your paycheck grew 3.1 percent this year. Prices grew 3.4.

That's the August numbers from the Bureau of Labor Statistics, and it means the average American got a raise and still ended up poorer. Real hourly earnings actually fell for the year. Heather Long at Navy Federal put it plainly, inflation is wiping out wage gains.

The villain here is energy. Gasoline jumped 3.9 percent in August alone, that's over a third of the entire inflation number, and diesel just touched six dollars a gallon for the first time ever, thanks to the wars in Iran and Ukraine. You can see the squeeze in where people shop. Wealthier households are heading to Costco, everyone else to Walmart, and both are trading down.

Long's best case? Wages and inflation converge around the start of 2027. Which means the most optimistic forecast on the table is breaking even, in about sixteen months.

This is Sara White, reporting for HIT.