US wage growth trails inflation, reducing purchasing power

US workers’ average hourly pay bought less than a year earlier because prices rose faster than wages, according to Labor Department figures cited by Al Jazeera on October 22. For workers whose pay did not keep pace, employment alone did not protect their spending power.

That pressure persisted even as the Labor Department’s broader unemployment and underemployment rate fell from 8.1% a year earlier to 7.6%, Al Jazeera reported. The improvement in that measure did not remove the gap between wage growth and rising prices.

Having a job does not mean having enough hours

The broader measure, called U-6, extends beyond unemployed people actively seeking work. It also includes people working part-time because they cannot find full-time jobs, and people who want work but have recently stopped looking. It therefore captures some shortages of paid work that the headline unemployment rate leaves out.

Al Jazeera reported that an estimated 4.5 million Americans were working part-time because they could not find full-time work. Another measure showed nine million people holding multiple jobs, representing 5.5% of all employed workers, according to the jobs report it cited.

The financial strain extended to necessities. In a Pew Research Center poll released earlier in October and cited by Al Jazeera, 44% of Americans said they had struggled over the past year to pay for at least one basic need, including transport, housing payments, medical care or food.

Workers describe cuts to spending and necessities

In Florida, Stacy Eichel lost her healthcare-company marketing job after a merger in September 2025, Al Jazeera reported. Her business making branded merchandise for corporate clients then had to cover more of her financial needs. Eichel said clients had tightened their budgets, while she had reduced dining out and takeout and cancelled cable service.

Joshua Teicher, a New York City video producer working in advertising, told Al Jazeera that work opportunities had dwindled and that he was struggling to afford prescriptions and food. He said he was drawing on savings and walking extra blocks to a cheaper grocery shop to make his money stretch further.