US Inflation Hits Three-Year High as Wage Growth Falls Behind

Inflation in the United States has been on the rise, hitting a three-year high in May. According to Menzie Chinn, professor of public affairs and economics at the University of Wisconsin-Madison, 'inflation is not as big of a concern in terms of its absolute value as it was maybe four years ago, but it's higher than we would want, and going forward we certainly don't want inflation to be running at this pace.' The latest consumer price index numbers show prices rose 3.5% over the last 12 months.

While wages have been rising, they are not keeping up with price growth. Nationally, wages and salaries rose 3.4% between March 2025 and March 2026, according to the Bureau of Labor Statistics. This means that workers' buying power is actually decreasing, as inflation outpaces wage growth.

Inflation calculators can help individuals understand how their purchasing power has changed over time. These tools allow users to enter a dollar value and see how the buying power of that dollar has changed. For example, according to the Bureau of Labor Statistics' CPI Inflation Calculator, you'd need $5.88 today to buy what a dollar would buy in 1976.