Home » Economy » Red-hot inflation eating away at most Americans' wage gains
Red-hot inflation eating away at most Americans' wage gains
Kudlow: There’s no reason for another inflationary spending bill
‘Kudlow’ examines the Biden administration’s ‘failed’ domestic and foreign policy agendas.
The tightest labor market in years is driving rapid wage gains for most workers – the only problem is that red-hot inflation is quickly eroding those increases.
The Labor Department reported on Friday that average hourly earnings for all employees actually decreased 2.4% in December from the same month a year ago when factoring in the impact of rising consumer prices. On a monthly basis, average hourly earnings increased by just 0.1% in December, when factoring in the 0.5% inflation spike.
DECEMBER INFLATION BREAKDOWN: WHERE ARE PRICES RISING THE FASTEST?
By that measure, the typical U.S. worker is actually worse off today than they were a year ago, even though nominal wages are rising at the fastest pace in years. That's because inflation is also surging: The government reported on Friday morning that the consumer price index rose 7% in December from a year ago, marking the fastest increase since June 1982, when inflation hit 7.1%.
The CPI – which measures a bevy of goods ranging from gasoline and health care to groceries and rents – jumped 0.5% in the one-month period from November.