BLS data shows April inflation outpacing wage gains

Two federal reports posted Tuesday (May 12) show a clear squeeze on the consumer, with higher energy, food and housing prices – just to name a few key areas – outpacing wage gains. Real average weekly earnings fell 0.2% between April 2025 and April 2026.

The U.S. Bureau of Labor Statistics (BLS) reported that real average hourly earnings for all employees fell 0.5% between March and April, and real average hourly earnings fell 0.3% between April 2025 and April 2026. The April numbers are preliminary and subject to revision.

“From April 2025 to April 2026, real average hourly earnings decreased 0.3 percent, seasonally adjusted,” the BLS noted. “The change in real average hourly earnings combined with no change in the average workweek resulted in a 0.2-percent decrease in real average weekly earnings over this period.”

Following are some of the numerical wage changes in Tuesday’s BLS “Real Earnings Summary” report.

Real average weekly earnings (earnings after inflation impact)
April 2026: $386.02
April 2025: $386.80

Real average hourly earnings
April 2026: $37.41
April 2025: $36.12

Real average weekly earnings
April 2026: $1,283.16
April 2025: $1,238.92

PRICE INCREASES
The Consumer Price Index for All Urban Consumers (CPI-U) rose 3.8% between April 2025 and April 2026, according to a BLS report. The index was up 3.3% at the end of March. The April increase was above the 3.7% consensus estimate among economists.

The nonadjusted energy price index rose 17.9% for the 12 months ended in April, and the food index rose 3.2%. The index for food at home rose 2.9%, and the index for food away from home rose 3.6%.

The nonadjusted shelter (housing) price index rose 3.3% for the 12 months ended in April. For the 12 months ended in April, electricity prices were up 6.1%, gas (all types) prices were up 28.4%, and all energy prices were up 17.9%.

“There is a real financial squeeze underway,” Heather Long, chief economist at Navy Federal Credit Union, said in a report. “For the first time in three years, inflation is eating up all wage gains. This is a setback for middle-class and lower-income households and they know it. They are having to cut back on spending and stretch every dollar.”

Commentary from RBC (Royal Bank of Canada) economists suggested the “sticky inflation” may not cause consumers to reduce spending unless and until job losses grow.

“Consumer staples including gas, food at home, clothing, and personal care products all rose this month,” noted the RBC analysis. “And we have seen affordability concerns show up in the consumer confidence data, which sit near record lows. The problem is a more meaningful pullback in demand is unlikely without more job losses – put another way, if consumers have jobs they will continue to spend.”