Inflation has been eating up wage gains for months. September was no better.
US wage growth fell to a five-year low of 3% in September, with average hourly earnings rising only 0.1% from August. Inflation continues to offset these gains, a trend that persisted through September. The US economy added only 29,000 jobs during the month. While the general inflation rate stood at 3.4% in August, core CPI rose 2.4% year over year. This stagnation in pay coincides with a job market characterized by fewer raises and a slow pace of wage increases not seen since 2021.
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- ✓ Average hourly earnings rose 0.1% from August and are up 3% year over year.
- ✓ US wage growth reached a five-year low of 3% in September.
- ✓ Inflation has been offsetting wage gains for several months, including September.
- ✓ The US economy added 29,000 jobs in September.
What changed
September jobs data reveals wage growth hit a five-year low of 3% and the US added only 29,000 jobs.
Live updates
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US Wage Growth Hits Five-Year Low as Inflation Erases Gains
US wage growth fell to a five-year low of 3% in September, with average hourly earnings rising only 0.1% from August. Inflation continues to offset these gains, a trend that persisted through September. The US economy added only 29,000 jobs during the month. While the general inflation rate stood at 3.4% in August, core CPI rose 2.4% year over year. This stagnation in pay coincides with a job market characterized by fewer raises and a slow pace of wage increases not seen since 2021.
Why it matters
Persistent inflation combined with slowing wage growth reduces the real purchasing power of workers. This economic environment mirrors patterns seen in the 1970s where energy prices and inflation soared while wages struggled. The current trend suggests a cooling labor market where hiring and firing have both slowed.
What is confirmed
- Average hourly earnings rose 0.1% from August and are up 3% year over year.
- US wage growth reached a five-year low of 3% in September.
- Inflation has been offsetting wage gains for several months, including September.
- The US economy added 29,000 jobs in September.
- Wages are rising at the slowest pace since 2021.
Still unconfirmed
- The current economic situation resembles the 1970s due to falling wages and soaring energy prices.
- The US job market is currently in a no hiring, no firing state.
What to watch next
- Future Consumer Price Index reports to see if inflation drops below 3.4%
- Upcoming monthly jobs reports to determine if job additions remain below 30,000
confidence 90%Sources used for this update (15)
- Yahoo Finance — Inflation has been eating up wage gains for months. September was no different.
- MarketWatch — Opinion: Falling wages, soaring energy prices and inflation: It’s beginning to look a lot like the 1970s
- WSJ — Wages Are Rising at the Slowest Pace Since 2021
- newrepublic.com — Eric Schmitt’s a Joke. The Assaults on Jack Smith Are Anything But. | The New Republic
- finance.yahoo.com — Stock market today: Dow, S&P 500, Nasdaq futures rise ahead of key jobs report as oil steadies
- Investopedia — The ‘No Hiring, No Firing’ Job Market Now Means Fewer Raises, Too
- Barron's — Wage Growth Disappoints
- finance.yahoo.com — Inflation has been eating up wage gains for months. September was no better.
- TradingView — US Wages Rise Less than Expected
- thespinoff.co.nz — Why the forecasters got it so wrong on the Covid unemployment rate | The Spinoff
- www.iranintl.com — Two Iranians hanged after being detained in January protests | Iran International
- www.iranintl.com — Iran workers face delayed wages, lost benefits and job fears
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