Inflation may have slowed down recently, but many Americans still feel its effects. A notable example is that 62% of workers believe their earnings haven’t kept pace with rising expenses over the last year, marking the highest level in four years, according to a new survey. This is a jump from 55% in 2022.
This situation highlights a common sentiment: for many, slower inflation doesn’t equate to lower prices. Essentials like coffee and ground beef are more expensive than ever. Meanwhile, the recent boom in AI data centers is contributing to higher electricity bills.
Even though prices are increasing at a slower annual rate now—2.9% as of August 2025 compared to 8.3% in August 2022—the cumulative effect has been severe, leaving many feeling uneasy about the future.
According to Sarah Foster, an economic analyst, Americans are essentially stuck between a decelerating job market and persistent inflation. Back in summer 2022, when annual inflation hit 9.1%, the job market was thriving, and optimism was high. Nowadays, that sense of hope seems to have vanished.
In fact, over 42% of workers in the Bankrate survey express doubt about their prospects for landing a better-paying job or receiving a raise in the next year, up from 36% just last year. Even among those who did see pay increases, 58% said their income still couldn’t keep up with inflation.
While the Labor Department reports that wages have risen faster than prices since May 2023, this increase isn’t sufficient to counteract earlier inflation spikes. Since January 2021, wages have trailed behind prices by a total of 1.2 percentage points, indicating that workers now enjoy less purchasing power than they did four years ago.
The ongoing trade tensions have also contributed to rising costs in recent months, albeit not as severely as some experts had initially feared. Federal policymakers are optimistic that the inflation spurred by tariffs will be temporary, but that unpredictability has made them cautious about adjusting interest rates too rapidly.
Currently, businesses seem to be absorbing many additional costs; however, these may eventually translate into higher prices for consumers.
The current government shutdown has led to an economic data blackout, which has put economists in a tricky spot. Fortunately, the Bureau of Labor Statistics is bringing some employees back to release the September inflation data, although it’s delayed by nine days from its original schedule.
The Bankrate survey was conducted among 2,497 U.S. adults from September 2nd to 4th, 2025.
