US incomes fall for third straight year as inflation rises

Business

By Shannon Thaler

You aren’t just imagining it: Your paycheck didn’t go as far last year as it did the year before — or the year before that.

Inflation surges outpaced the average pay raises of US workers in 2022 — the third consecutive year in which Americans have seen their standard of living take a tumble, according to fresh data from the US Census Bureau.

Inflation-adjusted median household income fell to $74,580 in 2022 — a 2.3% decline from the 2021 average of $76,330, the federal agency reported on Tuesday.

American incomes have been slipping gradually since 2020, when households enjoyed average earnings of $76,660.

This figure has dropped a whopping 4.7% since its peak in 2019, painting an ugly picture of how President Joe Biden’s economic policies have failed to counter pressures provoked by the pandemic — thus keeping inflation stubbornly high and wages gains too slow to keep up.

Householders who received their high school diploma — but not a college degree — saw an even larger year-over-year drop in income from 2021 to 2022, the Census Bureau found.

In 2021, these earners made an average of $54,350, which dropped a staggering 5.3% to $51,470 by 2022 when adjusted for inflation.

High earners who have obtained their bachelor’s degree or other advanced graduate degree experienced a 4.9% dip in earnings from 2021 to 2022 — from $124,500 to $118,300 on average.

Overall, the median annual spend for American households is $66,928 — meaning the average US family has less than $8,000 left over each year, according to Zippia.

On Wednesday, US inflation was higher than economists had expected, rising 3.7% in August versus a year earlier, according to the Bureau of Labor Statistics.

The core Consumer Price Index — a closely-watched measure of inflation that tracks changes in the costs of everyday goods and services, excluding food and energy prices — rose 0.3% from a month ago, slightly more than the 0.2% monthly gain in June and July.

The figures mean the Federal Reserve has more to accomplish in its aggressive tightening cycle if officials will get inflation down to their 2% target.

The hotter-than-expected inflation figures have left economists unsure if the Fed will hold interest rates steady next week following the central bankers’ highly-anticipated two-day meeting set for Sept. 19 and 20.

Whether Fed officials will raise its benchmark federal funds rate beyond its current range — between 5.25% and 5.5% — in November and December also remains up in the air.

One New Yorker feeling the squeeze is 32-year-old Indraja V., who moved from downtown Tampa, Fla., to Manhattan in April to take a job at a major tech consulting firm.

However, despite getting a $20,000 raise in base pay upon starting the new gig, bringing her base pay up to $131,000, Indraja told The Post that she “feels poor” in the inflation-riddled Big Apple.

“It would be a dream for a lot of people to achieve a six-figure salary, but it feels so small,” Indraja said, noting that after taxes and rent, she struggles to have enough funds to pay off her debt from obtaining her MBA, or for discretionary spending like gym memberships and plane tickets back to India to visit her family.

Indraja’s rent for her one-bedroom apartment is more than twice as expensive in NYC as it was in the Sunshine State.

She paid $2,000 for a one-bed abode in Tampa, but now dishes out $4,300 for her Manhattan digs.

“I give 65% of my salary to rent. It’s not an ideal situation,” she told The Post.

Also back in Tampa, “I would never think about how much I’m buying while grocery shopping, but a slice of watermelon is $11 near my apartment.”

“I sent a picture of it to my friends because I was so shocked,” Indraja said of the piece of watermelon, which was pre-sliced, plastic-wrapped and on sale for an eye-watering $11.74 at The Food Emporium.