NewsHK
Consumer prices in the United States rose 3.4 percent in the year to August, outpacing a 3.1 percent gain in wages over the same period.
Against the backdrop of a consumer economy that has already absorbed elevated price levels, the return of that gap marks a step backward for household purchasing power.
When prices grow faster than wages, workers' ability to sustain their current level of spending quietly erodes. Some of that adjustment happens immediately, through reduced discretionary outlays.
Some is deferred, as households run down savings before cutting spending patterns they have treated as fixed. Either way, the effect on demand accumulates before it shows up cleanly in any single data point.
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