(NewsNation) — Inflation has cooled in recent years, but Americans are still feeling the heat.
Nearly two-thirds of workers (62%) say their income hasn’t kept pace with rising expenses over the past year — the highest share in four years, according to a new Bankrate survey. In 2022, 55% said the same.
The uptick underscores what many Americans have come to realize: Slower inflation doesn’t mean lower prices. Grocery staples like coffee and ground beef cost more than ever, and an AI data center boom is helping drive power bills higher.
Overall, prices are climbing at a slower annual rate than just a few years ago — up 2.9% in Aug. 2025 compared with 8.3% in Aug. 2022 — but the cumulative effect is taking a toll, and recent data hasn’t been reassuring.
“Americans are being thrust between the worst of both worlds in economics: a slowing job market and rising inflation,” Bankrate economic analyst Sarah Foster said in a statement.
Back in the summer of 2022, when annual inflation peaked at 9.1%, the job market was red-hot, and workers were confident they could level up. Now, that optimism has faded.
More than 2 in 5 workers (42%) in Bankrate’s survey said they aren’t confident they’ll find a better-paying job or get a raise at their current position over the next 12 months — up from 36% in 2024. Even among those who did see a pay bump this year, most (58%) said their income still fell short of inflation.
According to the Labor Department’s measure of workers’ average hourly earnings, wages have been rising faster than prices since May 2023. Still, those gains haven’t been enough to make up for the earlier inflation surge.
Since Jan. 2021, wages have lagged prices by a total of 1.2 percentage points, meaning workers today have less purchasing power than they did four years ago, Bankrate noted.
The cost of key essentials like rent (+27%) and groceries (+25%) has also risen faster than overall inflation (23%) over the same period, leaving Americans feeling the squeeze where it matters most.
President Donald Trump’s trade war has added fresh pressure, pushing prices higher in recent months — though so far, not as much as many economists feared. Policymakers at the Federal Reserve are hoping the tariff-driven inflation bump proves short-lived, but the uncertainty has made officials cautious about cutting interest rates too quickly.
For now, businesses appear to be absorbing much of the added cost, but those expenses could eventually be passed on to consumers in the form of higher prices.
The ongoing government shutdown has also created an economic data blackout, leaving economists flying blind at a crucial moment. However, the Bureau of Labor Statistics is recalling some employees so it can release September’s inflation data — now scheduled for Sept. 24, nine days later than planned.
Bankate’s latest survey was conducted between Sept. 2-4, 2025, among 2,497 U.S. adults.
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