Average hourly wages for American workers increased more in August than July — 0.3 percent, versus 0.2 percent the month before, according to the Labor Department. That pushed the yearly hourly wage increase to 2.2 percent from 2.0 percent.
But even 2.2 percent wage inflation is considered anemic by many economists. That rate of income gain is well below the 3.5 percent to 4.0 percent rate of increase that would meet the Federal Reserve’s inflation target, according to a briefing by the Economic Policy Institute, and would enable American workers get ahead after the bite that price inflation takes out of their wages. With nominal wages having increased in the 1.8 to 2.2 percent range over the past several years of economic recovery, Americans are just barely keeping up with inflation, according to EPI.