Americans Have Seen No Real Wage Growth Since the Start of Trump's Second Term, per Bureau of Labor Statistics
American paychecks are bigger than they were two years ago. They just do not buy any more.
Since the start of President Trump's second term, Americans have seen no real wage growth on average, according to the Bureau of Labor Statistics.
Between January 2025 and September 2026, both consumer prices and average hourly pay rose by about 5.4%, leaving inflation-adjusted earnings essentially exactly where they started.
Six Straight Months of Shrinking Paychecks
The recent trend is worse than flat.
Real average hourly earnings fell 0.5% in September alone and were down 0.7% from a year earlier, the sixth consecutive monthly decline in inflation-adjusted pay.
Nominal average hourly earnings reached $37.81 in September, up 3.0% over the year, but consumer prices rose 3.7% over the same period, more than erasing the raise.
Real average weekly earnings also fell over the year despite a longer average workweek, meaning workers put in more hours for slightly less purchasing power.
Not Every Measure Is Flat
The wage picture depends on the gauge.
Census figures show real median household income rose 2.6% in 2025 to a record $87,460, helped by employment and household composition rather than hourly pay alone.
Treasury Secretary Scott Bessent has pointed to manufacturing and construction, where BLS data shows pay has beaten inflation since January 2025.
But for the average hourly worker, the squeeze is being driven by prices: energy costs and tariff-affected goods have pushed inflation back above wage growth since the spring.
The Top Midterm Issue
The timing makes the data politically explosive.
A Reuters/Ipsos poll in late August found 47% of registered voters said cost of living would be the single most important factor in deciding their midterm vote, and Pew found economic issues at the top of what voters want candidates to discuss.
With the November 3 midterms days away, six straight months of shrinking real paychecks hand Democrats a cost-of-living argument while the administration leans on the sectors and household measures still rising.
What It Means for the Options Market
Flat real wages are a slow squeeze on the consumer names that depend on discretionary spending, even with headline retail numbers still growing in nominal terms.
Watch consumer discretionary through XLY and retailers via XRT, value and grocery exposure through WMT, housing sensitivity in HD, and the broad index through SPY into the midterms and the December Fed meeting.
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