As rising prices continue to be an issue for many Americans, it looks like things might be getting a little better. In July, the Treasury Department released its report on purchasing power that found the typical American’s income has increased more than prices have since before the COVID-19 pandemic.
The Bureau of Labor Statistics looked at Americans’ median weekly real earnings, which is how much money they made when adjusted for inflation. It found that compared to the same time last year, people’s real earnings went up 2.5%.
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That means the median American’s purchasing power has improved. Purchasing power is what people are referring to when they say a dollar doesn’t go as far as it used to.
Here’s an example: Within the last 25 years, a person used to be able to go to the corner store and get two individual bottles of their favorite soda for just $1. Now, it’s almost $2 a bottle and the 2 for $3 deals are considered a score. That’s because in the past, a dollar had significantly more purchasing power than it does today.
The Treasury found that between June 2023 and June 2024, median American workers were able to buy the same amount of goods they could have in 2019 and still have some cash left over to spend or save — about $1,400 a year. That’s just about $54 every pay period if they get paid every two weeks.
So, while the Treasury’s report is good news for Americans overall, it might not feel like you’re reaping any benefits. A monthly survey of the Consumer Confidence Index found that while it rose to a six-month high in August, it remains below pre-pandemic levels.
A CNN poll released in July also found nearly 4 in 10 adults said they worry their family’s income won’t be enough to meet expenses.
Tags: Bureau of Labor Statistics, CNN, Consumer Confidence, Consumer Price Index, COVID-19, Inflation, Money, Pandemic, U.S. Treasury Department
AS RISING PRICES CONTINUE TO BE AN ISSUE FOR MANY AMERICANS… IT LOOKS LIKE THINGS MIGHT BE GETTING A LITTLE BETTER.
THE TREASURY DEPARTMENT JUST RELEASED ITS REPORT ON PURCHASING POWER… AND IT SHOWS THE TYPICAL AMERICAN’S INCOME *HAS* INCREASED MORE THAN PRICES HAVE SINCE BEFORE THE COVID-19 PANDEMIC.
BUT WHAT DOES THAT ACTUALLY MEAN?
THE BUREAU OF LABOR STATISTICS LOOKED AT AMERICANS’ MEDIAN WEEKLY *REAL* EARNINGS – WHICH IS HOW MUCH MONEY THEY MADE WHEN ADJUSTED FOR INFLATION.
IT FOUND THAT COMPARED TO THE SAME TIME LAST YEAR… PEOPLE’S REAL EARNINGS WENT UP TWO AND A HALF PERCENT.
THAT MEANS THE MEDIAN AMERICAN’S “PURCHASING POWER” HAS IMPROVED.
SO, YOU KNOW HOW PEOPLE SAY A DOLLAR DOESN’T GO AS FAR AS IT USED TO?
THAT’S PURCHASING POWER.
HERE’S AN EXAMPLE: WITHIN THE LAST 25 YEARS YOU USED TO BE ABLE TO GO TO YOUR CORNER STORE AND GET TWO INDIVIDUAL BOTTLES OF YOUR FAVORITE SODA FOR JUST ONE DOLLAR.
NOW – IT’S ALMOST TWO DOLLARS A BOTTLE… AND THE 2 FOR THREE DOLLARS DEALS ARE CONSIDERED A SCORE.
THAT’S BECAUSE IN THE PAST, A DOLLAR HAD SIGNIFICANTLY MORE PURCHASING POWER THAN IT DOES TODAY.
NOW THAT WE KNOW WHAT PURCHASING POWER IS – WHAT DOES IT MEAN THAT IT’S IMPROVING FOR AMERICANS?
THE TREASURY FOUND THAT BETWEEN JUNE 20-23 AND JUNE 20-24… AMERICANS WHOSE EARNINGS FELL ROUGHLY IN THE MIDDLE OF “NOT ENOUGH” AND “HONESTLY, WHO MAKES THAT MUCH?” WERE ABLE TO BUY THE SAME AMOUNT OF GOODS THEY COULD HAVE IN 20-19 *AND* STILL HAVE SOME CASH LEFT OVER TO SPEND OR SAVE – ABOUT 14-HUNDRED DOLLARS A YEAR.
THAT’S JUST ABOUT 54 BUCKS EVERY PAY PERIOD IF YOU GET PAID EVERY 2 WEEKS.
SO, WHILE THE TREASURY’S REPORT IS GOOD NEWS FOR AMERICANS OVERALL… IT MIGHT NOT *FEEL* LIKE YOU’RE REAPING ANY BENEFITS.
AND WE’RE SEEING THAT SENTIMENT – A MONTHLY SURVEY OF THE CONSUMER CONFIDENCE INDEX FOUND THAT WHILE IT ROSE TO A SIX-MONTH HIGH IN AUGUST, IT STILL REMAINS BELOW PRE-PANDEMIC LEVELS.
A RECENT CNN POLL RELEASED LAST MONTH ALSO FOUND NEARLY FOUR IN TEN ADULTS SAID THEY WORRY THEIR FAMILY’S INCOME WON’T BE ENOUGH TO MEET EXPENSES.
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