The Labor Department reported on Friday that average hourly earnings for all employees actually declined 1.7% in January 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 January, when factoring in the 0.6% inflation spike.
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 Thursday morning that the consumer price index (CPI) rose 7.5% in January from a year ago, marking the fastest increase since February 1982, when inflation hit 7.6%.
The CPI – which measures a bevy of goods ranging from gasoline and health care to groceries and rents – jumped 0.6% in the one-month period from December.