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Inflation surge has squeezed shoppers. Sluggish pay has made it worse
ABC News - Breaking News, Latest News and Videos • • business
Key Points:
- A recent government report shows falling grocery prices, cooling energy costs, and the lowest inflation since March, but price increases still outpace wage growth, reducing workers' purchasing power.
- Wages began trailing inflation in April, worsened by the Iran war's impact on gasoline prices, which surged 36% since February, keeping overall inflation above pre-war levels.
- The U.S. economy lost 23,000 jobs in July, with wage growth slowing due to a soft labor market and businesses managing higher costs through wage compression.
- Many consumers are responding to stagnant wages and rising prices by drawing down savings—now at the lowest rate since 2022—and increasing credit card debt, nearing record levels.
- Inflation remains a top concern for voters ahead of the November midterm elections, with economic issues influencing congressional voting decisions.
