Millions of Americans have received a pay cut over the past two years thanks to high inflation, a blow to President Biden as he attempts to center his re-election campaign around "Bidenomics."
The Labor Department reported Tuesday that average hourly earnings for all employees was $11.05 in October – a 3.32% decline from the $11.43 figure in January 2021, when Biden took office.
By that measure, the typical U.S. worker is actually worse off today than two years ago, even though nominal wages are rising at the fastest pace in years.
That's because consumers are confronting stubbornly high inflation, which has quickly diminished their purchasing power.
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The government said Tuesday that the consumer price index, a broad measure of the price of everyday goods including gasoline, groceries and rents, was unchanged in October from the previous month. Prices climbed 3.2% on an annual basis.
But when compared with January 2021, shortly before the inflation crisis began, prices remain up a stunning 17.62%.
Inflation has created severe financial pressures for most U.S. households, which are forced to pay more for everyday necessities like food and rent. The burden is disproportionately borne by low-income Americans, whose already-stretched paychecks are heavily impacted by price fluctuations.
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The latest findings from the Labor Department come amid growing pessimism among U.S. households about their financial situation under Biden.
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A new survey published by Bankrate last week shows that 50% of Americans say their financial situation has gotten worse since the 2020 presidential election. By comparison, just 21% think their financial situation has improved, while 26% believe it is unchanged.
"The plight of the economy over the next 12 months may help to dictate whether it was wise, or not, for President Biden to trumpet the branding of ‘Bidenomics,'" said Mark Hamrick, senior economic analyst at Bankrate.
Among Americans who are feeling pessimistic about their financial outlook, about half – 45% – blame Biden and his economic policies. Another 35% think that Congress is responsible, while 27% identified the Federal Reserve as the culprit.
The White House has lauded a mostly steady yearlong decline in inflation, but most economists agree that is due to the Federal Reserve's aggressive interest rate hike campaign and the resolution of supply chain disruptions, not the president's economic agenda.
While inflation has fallen from the highs of mid-2022, many families have yet to see material relief.
The consumer price index is still running well above the typical pre-pandemic rate, and the cost of necessities like food, gasoline, rent and child care remain far more expensive than they were just one year ago. Chronically high prices are forcing Americans to spend about $709 more per month than they did two years ago, according to a recent estimate from Moody's Analytics.
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As they spend more on everyday goods, Americans are burning through their savings, and are increasingly turning to credit cards to cover those basic expenses.
FOX Business' Edward Lawrence contributed to this report
