The only problem? The big pay jump was nothing more than a mirage when accounting for the hottest inflation rate in nearly four decades.
The Labor Department reported on Friday that average hourly earnings for all employees actually decreased 0.4% from October to November when factoring in the impact of rising consumer prices. Although average hourly earnings increased by 0.3% in November, that coincided with a top-line inflation increase of 0.8%.
On an annual basis, average hourly earnings actually plunged 1.9% in November from the previous year.
By that measure, the typical U.S. worker is actually worse off today than they were a year ago, even though nominal wages are rising at the fastest pace in years. That's because inflation is also surging: The government reported on Friday morning that the consumer price index rose 6.8% in November from a year ago, marking the fastest increase since June 1982, when inflation hit 7.1%.
The CPI – which measures a bevy of goods ranging from gasoline and health care to groceries and rents – jumped 0.8% in the one-month period from October.
The consumer price index rose 6.8% in November from a year ago, according to a new Labor Department report released Friday, marking the fastest increase since June 1982, when inflation hit 7.1%. The CPI – which measures a bevy of goods ranging from gasoline and health care to groceries and rents – jumped 0.8% in the one-month period from October.
Price increases were widespread: Energy prices jumped 3.5% in November and are up 33.3% year over year. Gasoline is a stunning 58.1% higher than it was a year ago. Food prices have also climbed 6.1% higher over the year, while used car and truck prices – a major component of the inflation increase – are up 31%.
The price spikes had eroded Americans' wages – bad news for President Biden, who has seen his approval rating plunge as inflation rose. The White House has blamed the increases on supply-chain bottlenecks and other pandemic-induced disruptions in the economy, while Republicans have pinned it on the president's massive spending agenda.
Biden told reporters on Friday that he expects the most rapid inflation to decelerate in coming months.
"It's the peak of the crisis," he said. "I think you’ll see it change sooner than, quicker than, more rapidly than it will take – than most people think."