Growth in wages is outpacing increasing prices across the wage distribution in the US. Economists would say consumers are experiencing ‘real wage growth’ i.e., they can buy more goods and services with their earnings. Interestingly, employees in the lowest income cohorts are experiencing the most wage growth. For instance, the 10th percentile earners have seen their wages increase 34% between Q1 2019 and Q1 2024 compared to an increase in consumer prices of 19% over the same period. Over the last year, consumers have also experienced real wage growth across the wage distribution, with wages growing 3.8% vs. prices increasing 2.6%.
Source: US Bureau of Economic Analysis, US Bureau of Labor Statistics, April 2024.