For the first time in three years, Americans’ wages are no longer outpacing inflation.
Prices rose 0.6% on a monthly basis, driving the annual rate to 3.8%, the highest since May 2023, according to the latest Consumer Price Index data released Tuesday by the Bureau of Labor Statistics.
Economists had expected prices to rise 0.6% from March and for the annual rate to climb to 3.7%.
The energy price shock from the US-Israeli war with Iran is further compounding longstanding affordability concerns for Americans weighed down by years of fast-rising prices.
However, at least in recent years, Americans’ pay growth has outpaced the rate of inflation. That changed last month: Annual inflation-adjusted average hourly wage growth went negative for the first time since April 2023.
This comes as Americans also have to contend with an energy price shock that’s rippling through the economy, making some of the most commonly purchased items even more expensive.
For example, prices of fresh fruits and vegetables, which are often transported by refrigerated diesel trucks, rose by 2.3%, the highest monthly increase for that category in more than 16 years, BLS data shows.
Stock futures slightly pared losses but remained in the red Tuesday morning: Dow futures were down 18 points. S&P 500 futures were 0.3% lower and Nasdaq 100 futures were down 0.75%. Treasury yields fluctuated but remain slightly higher. The 10-year yield traded at 4.43%, up two basis points.
This story is developing and will be updated.
