A new report from the U.S Treasury has found that the purchasing power of Americans has now surpassed pre-pandemic levels.
The Treasury’s analysis explores the interplay of wages, employment, and prices to determine overall purchasing power.
Among its key findings, the analysis showed that real wages have risen since the pandemic across the income distribution. In particular, middle income and lower income households have seen their real earnings rise more rapidly. In the past 12 months, it said that real wages overall have grown faster than they did in the pre-pandemic expansion.
As a result, the analysis found that household purchasing power has increased. For example, in 2023, the median American worker can afford the same goods and services as they did in 2019, plus an additional $1,000 to spend or save—because median earnings rose faster than prices.
It points out that the U.S. economy now has over 2 million more jobs than pre-pandemic forecasters expected. Thus, it said, more workers are benefitting from increased purchasing power, thanks to the strong and resilient labor market.
The report also points out that other advanced economies have generally seen lower, and in some cases negative, real wage growth.
The analysis was conducted by Assistant Secretary for Economic Policy Eric Van Nostrand, Deputy Assistant Secretary for Microeconomics Laura Feiveson, and Deputy Assistant Secretary for Macroeconomics Tara Sinclair.