Wages were on track to catch up to prices in 2026. Why they might not.
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Wages in the US were expected to catch up to prices in 2026, but a hiring slowdown and the Iran war may have disrupted this trend. Despite some wage gains, economists expect inflation to surge due to rising oil and gas prices, potentially widening the gap between wages and prices.
The US economy was expected to see wages catch up to prices in 2026. However, recent events have changed this outlook. A hiring slowdown and the Iran war have impacted the economy. Inflation is expected to rise due to oil and gas prices. The Bureau of Labor Statistics reported average hourly earnings increased by 3.5% over the last year. Economists are watching the consumer price index reports for March and April. Some workers have seen higher paychecks, particularly in retail and healthcare. However, wages in other sectors, such as manufacturing and construction, have lagged behind inflation.
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