One place that everyone has felt inflation over the past several months is at the grocery store. | Adobe Stock
One place that everyone has felt inflation over the past several months is at the grocery store. | Adobe Stock
Sky-high inflation, reported to be 9.1% for June, is causing the sharpest real-wage decline in several decades.
Even with a strong job market, typical workers in North Carolina and across the nation are ending up financially worse off with each month that passes. Meanwhile, consumer sentiment is falling quickly.
“Real (inflation-adjusted) hourly earnings declined at the steepest (rate) in four decades in June. For a couple earning $100,000 last year, this is a $3,600 pay cut in 2022," Joel Griffith, a research fellow and economist at the Heritage Foundation, said in a July 14 tweet.
That tweet came in response to Wednesday’s announcement by the U.S. Bureau of Labor Statistics (BLS) that reported real average hourly earnings decreased 3.6%, seasonally adjusted, from June 2021 to June 2022, and decreased 1% from May to June.
The BLS released the Consumer Price Index (CPI) data for the 12 months ending June 2022. The data showed an 9.1% all-items annual increase, which represents a new four-decade high. The largest contributor was the increase in the index for gasoline, followed by the food and shelter indexes.
After subtracting CPI inflation, the average pay for nonmanagerial workers was down 2.7% over the past year. That was the steepest drop since 1980 — except for a single month at the start of the COVID-19 pandemic, when the data was distorted — Axios reported.
Average hourly earnings for private-sector workers are up 2.2% since December. While Axios says that would typically be ideal for a six-month period, consumer prices have risen 5.4% in that same span, outpacing wage increases.
In conjunction with the price pressures, consumer sentiment during the month of June was reported at an all-time low. According to the University of Michigan's Surveys of Consumers results, June saw a -41.5% year-over-year change in the Index of Consumer Sentiment. The Index also saw a -14.4% change from May to June.
This is not good news for President Joe Biden, whose leadership has been criticized over the issue of inflation. The majority of Americans continue to disapprove of his job performance. The latest New York Times/Siena College poll revealed the president's approval rating is now at 33% among Americans, while more than three-quarters of registered voters said they think the U.S. is moving in the wrong direction. On the basis of that data, The New York Times reports that the "pessimism spans every corner of the country, every age range and racial group, cities, suburbs and rural areas, as well as both political parties.”
World Population Review shows the average household income in North Carolina is $76,940. When adjusted for inflation, this number drops by $2,770, bringing the annual income to $74,170.
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