Are wages keeping up with inflation?
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Yes. From March 2024 to March 2025, wages grew 0.8 percentage points faster than inflation. Nominal wages — the literal dollars earned regardless of cost of living — increased by 3.2% while inflation stood at 2.4%. When wage growth outpaces inflation, it indicates that workers are experiencing an increase in purchasing power from the previous year.
Mar 2024 to Mar 2025
3.2%
Nominal average weekly wage growth
Mar 2024 to Mar 2025
2.4%
Inflation rate
The Bureau of Labor Statistics has published average weekly wage data for more than 19 years, since March 2006. Looking back, average wages outpaced inflation 71.3% of the time. Most recently, wage growth was faster than inflation in every month since February 2024.
Between Mar 2024 to Mar 2025, average weekly wages grew faster than inflation.
Difference in year-over-year change of average weekly earnings and CPI
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 7.6% over the previous year while inflation was at 0.2%, a record-high gap of 7.4 percentage points. This spike was attributed to pandemic labor market disruptions that disproportionately affected lower-wage jobs.
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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 March 2025, average weekly wages grew 3.2% compared with an inflation rate of 2.4%
Year-over-year change of average weekly earnings and CPI
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 $686 to $1,225, a 78.7% increase. Once adjusted to February 2025 dollars, it went from $1,095 to $1,225, a 11.9% increase. The nominal wage growth was $540, but the real wage growth was $130.
Between February 2024 and February 2025, the nominal average wage grew from $1,185 to $1,225 — $40 more a week, a growth rate of 3.4%. Accounting for inflation, the real wage growth was 0.58% or an additional $7 a week.
Since March 2006, the nominal average wage grew by $545 per week. Adjusted for inflation, that's $134.
Average weekly wage, nominal and inflation-adjusted
Between February 2024 and January 2025, the nominal average wage grew from $1,138 to $1,181 — $43 more a week, a growth rate of 3.6%. Accounting for inflation, the real wage growth was 0.9% or an additional $9 a week.
Real wages increased in 37 states and Washington, DC.
Average weekly wage growth (Monthly average from Mar 2024 - Feb 2025)
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Methodology
USAFacts standardizes data, in areas such as time and demographics, to make it easier to understand and compare.
The analysis was generated with the help of AI and reviewed by USAFacts for accuracy.
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.
