Are wages keeping up with inflation?

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Yes. From August 2025 to August 2026, wages grew 0.29 percentage points faster than inflation. Nominal wages — the literal dollars earned regardless of cost of living — increased by 3.7% while inflation stood at 3.4%. When wage growth outpaces inflation, it indicates that workers are experiencing an increase in purchasing power from the previous year.
Aug 2025 to Aug 2026

3.7%

Nominal average weekly wage growth
Aug 2025 to Aug 2026

3.4%

Inflation rate
The Bureau of Labor Statistics has published average weekly wage data for more than 20 years, since March 2006. Looking back, average wages outpaced inflation 72.5% of the time. Most recently, wage growth was faster than inflation in every month since June 2026.

Between Aug 2025 to Aug 2026, average weekly wages grew faster than inflation.

Difference in year-over-year change of average weekly earnings and CPI, Mar 2007 - August 2026

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A number of factors influence the nominal wage growth and inflation rates, including labor costs and the labor market itself. In May 2020, wages increased 7.5% over the previous year while inflation was at 0.1%, a record-high gap of 7.4 percentage points. This spike was attributed to pandemic labor market disruptions that disproportionately affected lower-wage jobs.
The biggest negative gap (4.3 percentage points) was in June 2022, when nominal wages grew by 4.8% year over year while inflation hit 9.1%.

In August 2026, average weekly wages grew 3.7% YoY compared with an inflation rate of 3.4%.

Year-over-year change of average weekly earnings and CPI, Mar 2007 - August 2026

How have wages grown over time after accounting for inflation?

We can measure the effect of inflation on wage growth by comparing the nominal average weekly wage to its inflation-adjusted (or “real” wage) equivalent. Since March 2006, the nominal average wage rose from $685 to $1,299, a 89.5% increase. Once adjusted to August 2026 dollars, it went from $1,149 to $1,299, a 13% increase. The nominal wage growth was $613, but the real wage growth was $150.
WAGES
In August 2026, the average weekly wage was $1.3K.
Source: Bureau of Labor Statistics
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Between Aug 2025 and Aug 2026, the nominal average wage grew from $1,252 to $1,299 — $47 more a week, a growth rate of 3.7%. Accounting for inflation, the real wage growth was 0.29% or an additional $4 a week.

Since March 2006, the nominal average wage grew by $613 per week. Adjusted for inflation, that's $150.

Average weekly wage, nominal and inflation-adjusted

Which states have the highest wage growth?

Real wage growth varies geographically. Over 12 months ending with Aug 2025 - Aug 2026, wage growth outpaced inflation in 33 states and Washington, DC, and the highest real wage growth was in New Mexico, at 8%. In 17 states, real wage growth was negative, meaning wages didn’t keep up with inflation; Wisconsin saw the steepest drop, with -2.9%.

Real wages increased in 33 states and Washington, DC.

Average weekly wage growth (Monthly average from Aug 2025 - Aug 2026)

Average weekly wage growth (monthly average from Aug 2025 - Aug 2026), by state

Average weekly wage growth (monthly average from Aug 2025 - Aug 2026), by state
1.

New Mexico

+8%
2.

Hawaii 

+7.6%
3.

District of Columbia

+5.6%
4.

Missouri 

+5.5%
5.

Louisiana 

+5.5%
6.

Maryland 

+4.2%
7.

Virginia 

+4.1%
8.

Texas 

+3.6%
9.

Wyoming 

+3.5%
10.

Florida 

+3.3%

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Methodology

USAFacts standardizes data, in areas such as time and demographics, to make it easier to understand and compare.

Page sources

USAFacts endeavors to share the most up-to-date information available. We sourced the data on this page directly from government agencies; however, the intervals at which agencies publish updated data vary.