US Jobs Report to Reveal Impact of Waning Pay Growth on American Spending
Despite more than five years of higher prices, Americans have continued to spend. However, the paychecks that have powered this spending are starting to lose steam.
The jobs report on Friday will show how much further pay gains are falling behind inflation. The resilience of American spending has been attributed to various factors, including wealth gains, demographics, post-pandemic savings, and a robust stock market.
According to Kathy Bostjancic, chief economist at Nationwide, 'Having a job enables confidence to keep spending despite inflation headwinds.'
Job growth has improved from last year, but paychecks are losing their fizzle. The energy shock spurred by the US-Israeli war with Iran has led to inflation outpacing pay growth for five months.