Real Wages Down for 26th Straight Month
The annual United States inflation rate slowed to 4 percent in May as the Federal Reserve hiked its fed funds rate to a target range between 5 and 5.25 percent. Yet that does not mean life is getting more affordable for the average American.
Real wages (adjusted for inflation) are down for the 26th straight month—a stretch twice as long as the global financial crisis and a new American record. According to the financial blog Zero Hedge, Americans have watched their real wages decrease by 2.7 percent under Joe Biden.
Rising debt: Rather than lower their standard of living to cope with inflation, however, many Americans are turning to credit cards and personal loans. Total consumer debt hit $17.05 trillion in the first quarter of 2023, meaning the average U.S. household carries $130,000 in debt. That included about $92,000 in mortgage loans; $12,000 in auto loans; $12,000 in student loans; $7,500 in credit card loans; and $7,500 in other loans.
Overall, this debt burden has increased by nearly 10 percent since 2020. Millions of Americans desperately need to find ways to reduce their standard of living before falling wages drive them even deeper into debt.
Prophecy says: A Republican victory in the 2024 U.S. presidential election could temporarily stabilize the economy, yet the Bible indicates that falling wages and rising inflation will worsen in the long term. The Prophet Haggai describes current and future economic conditions this way: “Ye have sown much, and bring in little; ye eat, but ye have not enough; ye drink, but ye are not filled with drink; ye clothe you, but there is none warm; and he that earneth wages earneth wages to put it into a bag with holes” (Haggai 1:6).