Key Trump economic win disappears: Wage gains wiped out
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A year's worth of inflation-adjusted wage gains vanished in just four months, leaving workers little better off than when President Trump returned to office.
Why it matters: The reversal shows how the recent energy-driven inflation surge is eating into household purchasing power. Real pay for rank-and-file workers is up just 0.1% since Trump took office in January 2025.
- Rising real wages helped underpin the White House's case that the economy was improving. That advantage has now largely disappeared.
By the numbers: After rising for much of 2025, real wage growth has effectively stalled across the labor market. Inflation-adjusted hourly earnings for all private-sector workers are unchanged from last January.
- Earnings for production and nonsupervisory workers — a widely used proxy for private-sector working-class employees — are up just 0.1% over that time frame.
Zoom in: Average hourly earnings for production and nonsupervisory workers — a widely used proxy for private-sector working-class employees — have risen a cumulative 4.9% since January 2025.
- But inflation, as measured by the Consumer Price Index, is up just as much over the same period.
Flashback: Exactly a year ago, White House officials highlighted this gauge as evidence that working-class Americans were seeing their paychecks stretch further.
- Now, by this measure, real pay has given back nearly all of those gains.
What to watch: Inflation was 4.2% for the 12 months through May, the fastest pace since April 2023.
- The surge was driven in large part by higher energy prices linked to the Iran war.
- The silver lining: Inflation looks so far contained to energy-related sectors, rather than bleeding to other household purchases as economists feared.
What they're saying: "The numbers were great," Trump said in the Oval Office, responding to a question about whether he was concerned about the inflation data released earlier on Wednesday.
- "I love the inflation," Trump said, later adding that oil prices were "going to come down like a rock" once the war ends.
The other side: "President Trump has always been clear about the fact that oil and gas prices — and thus overall inflation — will rapidly drop as soon as the Iran situation is resolved," White House spokesperson Kush Desai said in a statement.
- He added that before the start of the Iran war, American workers had recovered a significant portion "of the real wage losses they experienced under Joe Biden, thanks to this Administration's commonsense agenda of deregulation, tax cuts and energy abundance."
