U.S. Wage Growth Trails Inflation for First Time Since 2023

U.S. wage growth fell behind inflation in April for the first time since 2023. 6 percent, according to recent labor data. Roughly three-quarters of Americans say their incomes are not keeping up with rising prices. A CBS News poll conducted May 13-15 found that 76 percent of respondents expressed concern about their personal finances.

Surging gasoline prices drove much of the April increase. Gasoline prices jumped more than 28 percent on an annual basis, accounting for 40 percent of the overall inflation spike. Higher energy prices are also pushing up costs for some consumer goods. Former Federal Reserve Chair Jerome Powell said on April 29 that higher energy prices will push up overall inflation in the near term.

Consumer spending has held up so far this year even as prices rise. Gbenga Ajilore, chief economist at the Center on Budget and Policy Priorities, said cuts to food stamps and health care are adding pressure on households. Ajilore warned that a broader pullback in spending could slow economic growth.

Uncertainty over the Iran war and ongoing tariffs make it difficult to predict when inflation might ease, he said.