Incomes for Americans failed to keep pace with inflation in the third quarter of 2026, according to new data from the Bureau of Labor Statistics.
The data showed Americans' real income fell 0.6% during the 12 months ended in September. In June, real income was down 0.3% over the previous 12-month period.
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Real income declined by as much as 3% annually in 2021 and 2022, when inflation reached two-decade highs, before rebounding from 2023 through 2025. However, wage growth has slowed in recent years, and rising inflation following U.S. military strikes against Iran has eroded workers' purchasing power.
The BLS reported that wages and salaries increased 3.1% during the 12 months ended in September. Meanwhile, the Consumer Price Index showed prices for goods and services rose 3.7%.
One factor contributing to higher inflation is rising fuel costs. Gasoline and diesel prices have increased amid concerns about energy shipments moving through the Strait of Hormuz.
A new Gallup poll indicates the economy is voters' top concern, reaching its highest level since 2010.
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The latest income data comes despite President Donald Trump's continued focus on wage growth in the United States. While wages have risen during his time in office, the data shows those gains have been outpaced by higher consumer costs.
