September’s jobs report extended a trend that illustrates consumers’ widespread pain: Their pay is not keeping pace with inflation.
Average hourly earnings rose an anemic 0.1% month over month and are up 3% year over year, new Labor Department data showed. That’s against a backdrop of inflation data, which showed, most recently, prices growing at a 3.4% rate as of August.
The inversion, when inflation overtook pay growth, happened this spring.
“Inflation has eaten up all wage gains for the average worker since April. Many people are having to make hard choices about what to buy and what to skimp on right now,” Heather Long, chief economist for Navy Federal Credit Union, posted on X.
Read more: How to protect your savings against inflation
“Notable: Wages only ticked up 0.1% in the month of September,” she added. “That was the weakest monthly gain since December 2025.”
The 3% annual figure is the slowest since May 2021.
September’s jobs report painted a bleak picture overall: the economy added just 29,000 jobs, well below expectations, unemployment ticked up, and previous months’ job figures were revised downward by 60,000 jobs.
Overall, however, the long-running “low hire, low fire” dynamic seems to be holding. Not great news for job seekers, but not an alarm bell for economists either.
“Notwithstanding this month’s disappointment, I’m generally quite positive on labor market developments in 2026,” Guy Berger, senior adviser on labor markets at Access/Macro, wrote on X. “The one big exception is wage growth, which has weakened.”
Molly Moorhead is the economics editor at Yahoo Finance.
Click here for the latest economic news and indicators to help inform your investing decisions
Read the latest financial and business news from Yahoo Finance
Source: finance.yahoo.com
