The September jobs report continued a trend that illustrates widespread consumer pain: Their wages are not keeping pace with inflation.
The average hourly wage increased 0.1% month-over-month and 3% year-over-year, according to new data from the Labor Department. This comes against the backdrop of inflation data, which most recently showed prices rising 3.4% in August.
The reversal, when inflation outpaced wage growth, occurred this spring.
“Inflation has eaten up all of the average worker’s wage gains since April. Many people are having to make tough choices about what to buy and what to skimp on right now,” Heather Long, chief economist at Navy Federal Credit Union, posted on X.
Learn more: How to protect your savings against inflation
“Remarkable: wages only increased by 0.1% in September,” she added. “This is the lowest monthly gain since December 2025.”
The 3% annual figure is the slowest since May 2021.
The September jobs report paints a generally gloomy picture: the economy created only 29,000 jobs, well below expectations, unemployment rose and employment figures from previous months were revised down by 60,000 jobs.
Overall, however, the long-standing “low hiring, low firing” dynamic appears to be holding up. That’s not good news for job seekers, but it’s not a wake-up call for economists either.
“Despite this month’s disappointment, I am overall quite positive about how the labor market will develop in 2026,” Guy Berger, senior advisor for labor markets at Access/Macro, wrote on X. “The one big exception is wage growth, which has weakened.”
Molly Moorhead is a business editor at Yahoo Finance.
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