The Sconi

That raise you got last year has gone up in smoke as the nation’s 9.1% inflation rate translated into a decline in buying power over the past year.

The strong job market aside, typical workers in Wisconsin and across America are becoming financially worse off with each month that passes. Amid that real-wages decrease, consumer sentiment has fallen precipitously.

"REAL (inflation-adjusted) hourly earnings DECLINED at the steepest in four decades in June," Joel Griffith, a research fellow and economist, said on Twitter Thursday. "For a couple earning $100,000 last year, this is a $3600 pay cut in 2022."

Griffith’s tweet came on the heels of the U.S. Bureau of Labor Statistics (BLS) reporting on July 13 that real average hourly earnings decreased 3.6%, seasonally adjusted, from June 2021 to June 2022, and it also decreased 1% from May to June. 

BLS numbers also showed the Consumer Price Index (CPI) data for the 12 months ending June 2022 as representing a 9.1% all items annual increase, a new four-decade high. The indexes for gasoline, food and shelter were the major drivers behind the increase. 

When CPI inflation was subtracted, the average pay for non-managerial workers was down 2.7% over the past 12 months; a report by Axios said. That is she steepest drop since 1980—except for a single month at the start of the pandemic.

On paper, average hourly earnings for private-sector workers are up 2.2% since December 2021, in what Axios called a typically ideal situation. But with the 5.4% jump in consumer prices over the same time frame, that wage increase disappears. 

As higher prices put the squeeze on American wallets, consumer sentiment for June was reported at an all-time low. The University of Michigan's Surveys of Consumers showed that June saw a -41.5% year-over-year change in the Index of Consumer Sentiment and a -14.4% change from May to June. 

As economic pressures have risen, Americans’ support for President Joe Biden has fallen, the New York Times said. The latest New York Times/Siena College poll revealed the president's approval rating is now down to 33%. The same survey showed more than three-quarters of registered voters think the country is moving in the wrong direction. 

"Pessimism spans every corner of the country, every age range and racial group, cities, suburbs and rural areas, as well as both political parties,” the Times reported as a conclusion from the numbers. 

World Population Review said the average household income in Wisconsin is $80,674. When adjusted for inflation, however, this number drops by $2,904 to bring the annual income to $77,770.