Are U.S. Wages Keeping Up With Inflation? (2007-2025)

The U.S. Bureau of Labor Statistics (BLS) tracks average weekly earnings and inflation, allowing analysts to assess whether wages are keeping pace with rising prices. A recent visualization by USAFacts maps year-over-year wage growth against inflation from 2007 to 2025.

This article was written by Jeff Desjardins and originally published by Visual Capitalist.

Here’s the dataset highlighting major turning points in the wage-inflation relationship:

Two notable outliers stand out: In May 2020, wage growth hit 7.5% while inflation remained nearly flat at 0.1%—a reflection of job losses skewed toward lower-income roles during the pandemic.

Conversely, in June 2022, inflation surged to 9.1% while wages rose only 4.8%, producing the sharpest negative gap in the dataset.

Wages vs. Inflation: Long-Term Trends

Since March 2006, the nominal average weekly wage increased from $686 to $1,225—a 78.7% jump. However, after adjusting for inflation (real wages), that gain shrinks dramatically: from $1,095 to $1,225 in 2025 dollars, or just an 11.9% increase.

This means that while wages appear to be rising, the actual purchasing power of American workers has grown at a much slower pace. Out of the nearly $540 increase in nominal weekly earnings, only $130 reflects real income growth.

Recent Wage Trends Offer Modest Gains

The good news? Since February 2024, wage growth has consistently outpaced inflation. From February 2024 to February 2025, nominal wages rose by 3.4%, from $1,185 to $1,225 per week. Adjusting for inflation, real wage growth was about 0.58%, adding $7 of weekly purchasing power.

This suggests modest recovery in wage value as inflation cools—though not enough to offset the larger gaps from earlier years.