Rising inflation squeezes earnings of US employees, shows BLS data
Washington DC, June 10
,: The US real average hourly earnings for all employees decreased 0.1 per cent from April to May, the US Bureau of Labour Statistics reported today.
The decrease in earnings stems from a 0.3 per cent increase in average hourly earnings combined with an increase of 0.5 per cent in the Consumer Price Index for All Urban Consumers (CPI-U).
"Real average weekly earnings decreased 0.2 per cent over the month due to the change in real average hourly earnings combined with no change in the average workweek," according to the data released by the BLS.
The real average hourly earnings decreased 0.7 per cent from May 2025 to May 2026.
"The change in real average hourly earnings combined with a 0.3-per cent increase in the average workweek resulted in a 0.4-per cent decrease in real average weekly earnings over this period," the BLS said.
The squeeze in earnings of US employees shows how the rising inflation is eating into their wages. Despite a strong jobs report in May, the stress among US households is building up as they grapple with constrained budgets.
Higher energy prices have raised the pump prices of gasoline, forcing US consumers to dip into their financial savings to meet the rising expenditure.
The US CPI inflation for the month of May came in at 4.2 per cent. The fastest rise in inflation in three years reflects the stress that's building up owing to higher energy prices. The continued closure of the Strait of Hormuz and a protracted conflict in the Middle East have added to concerns that oil prices will remain elevated.
The US EIA, in a recent report, estimated that spot Brent crude oil prices will stay at USD105 per barrel for June and July.
Higher inflation, along with a strong jobs report in May, could make the task of the newly appointed US Federal Reserve chairman, Kevin Warsh, tough. Experts have already ruled out any chance of a rate cut this year.
— ANI
Reader Comments
Living in the US, I can tell you it's real. My grocery bill has gone up 15% in the past year, and gas prices are killing us. The fact that real earnings are dropping even with a strong job market shows this isn't just a temporary blip—it's structural. I've had to cut back on savings and eating out.
Eh, typical American media hype. US households still have way more disposable income than us in India—they earn in dollars and spend in dollars. The real story is how this affects global markets and remittances to countries like ours. If US consumers tighten belts, Indian IT exports and services will take a hit. That's what worries me.
With the Strait of Hormuz situation and oil above $100, this is only going to get worse. The US should be working on diplomatic solutions in the Middle East instead of fueling conflicts. Common people always suffer while politicians and oil companies profit. 😤
I'm a small business owner here in the US, and my costs are through the roof. Raw materials, shipping, energy—everything is up. I've had to raise prices 8% this year, and customers are complaining. The problem is that wages aren't keeping up, so people are spending less. It's a vicious cycle.
This is a classic demand-pull inflation scenario. US stimulus checks and low interest rates flooded the market with cash, and now supply chains can't
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