Pay rose 3.1% in the year to August. Prices rose 3.4%.
Average hourly earnings reached $37.75 in August. Measured against inflation over the same twelve months, the average worker went slightly backwards.
- What happened
- Average hourly earnings rose 3.1% over the twelve months to August 2026, to $37.75. Consumer prices rose 3.4% over the same period.
- Why
- Pay and prices are measured by the same agency over the same window, which makes the comparison unusually clean. When prices rise faster than pay, an unchanged wage buys less.
- The numbers that matter
- +3.1%Average hourly earnings, 12 months$37.75Average hourly earnings, August+3.4%Headline CPI, 12 months−0.3ppDifference
- Why it matters
- This is the number behind the feeling that a pay rise did not help. It is small, it is measurable, and it compounds.
- What happens nextas we saw it on 21 Sep 2026
- The September employment and CPI reports are both scheduled by the Bureau of Labor Statistics and will update both sides of this comparison.
Pay grew. It grew slightly slower than the prices it has to cover.
| Headline CPI | 3.4% |
|---|---|
| Average hourly earnings | 3.1% |
| Shelter | 3.0% |
| Core CPI | 2.4% |
In August the average American worker earned $37.75 an hour, ten cents more than in July. Over twelve months, average hourly earnings rose 3.1%.
Over the same twelve months, the prices those earnings have to cover rose 3.4%.
Earnings up 3.1% against consumer prices up 3.4% leaves a shortfall of 0.3 percentage points over the year. This is a subtraction of two published twelve-month rates, not a separately measured statistic.
What that does and does not mean
It does not mean wages are collapsing. A 0.3 point shortfall is small, and it follows periods where pay ran ahead of prices. What it means is that in the year to August, the average hourly wage bought slightly less than it did a year earlier.
Average hourly earnings cover all private non-farm employees. Your own pay, and the basket of things you actually buy, can both differ from the average by more than the gap being measured here.
Where the pressure is coming from
The prices doing the work are not spread evenly. Core inflation — the measure that strips out food and energy — ran at 2.4%, below wage growth. Headline inflation ran at 3.4%, above it. The difference between those two measures is almost entirely energy.
Which means the average worker's pay kept pace with the cost of most things, and did not keep pace with the cost of filling a tank.
Sources
- The Employment Situation — August 2026U.S. Bureau of Labor Statistics · Sep 4, 2026 · Primary source
- Consumer Price Index Summary — August 2026U.S. Bureau of Labor Statistics · Sep 11, 2026 · Primary source
Related analysis
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The Federal Reserve watches one of these numbers and you pay the other. The gap between them in August was almost entirely the price of energy.
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