In recent years, Americans have seen an increase in their pay, but the rising prices have overshadowed these raises. However, the tide seems to be turning as wage increases are now outpacing inflation, according to the Wall Street Journal. Adjusted for inflation, average hourly wages rose by 1.2% in June, marking the second consecutive month of positive growth. This trend suggests that the May increase was not a fluke. NBC News highlights that in June 2022, real average hourly earnings actually declined by 3.2%. Additionally, non-supervisory workers saw an even greater increase of 2.2% in June.
This positive development provides Americans with the opportunity to boost the economy through increased spending, potentially helping the US avoid a recession, as stated by the Journal. However, the Federal Reserve is concerned about wages rising too rapidly, as reported by CNN. Federal Reserve Chairman Jerome Powell expressed his viewpoint in June, stating, “It’s great to see wage increases, particularly for people at the lower end of the income spectrum, but we want that as part of the process of getting inflation back down to 2%, which benefits everyone.” Currently, inflation is running at 3%. The upcoming Federal Reserve meeting is expected to result in another interest rate hike in an effort to reach the 2% target, according to Reuters.
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