Whether they work in restaurants, offices or warehouses, Americans have seen their paycheck eaten up by a surge in everyday costs recently.

Inflation has outstripped wage growth in key private-sector industries for two straight months, according to data compiled by Bloomberg. The sharp drop in buying power for employees in sectors ranging from healthcare to finance and retail was largely the result of a surge in energy prices driven by the Iran war, but the dynamic is likely to stick even as gasoline gets cheaper.

Gas prices, which have dropped since the U.S. and Iran agreed to an interim peace deal, are still almost $1 a gallon higher on average than they were before the conflict started at the end of February, based on American Automobile Association data. But war-driven inflation in other parts of the economy, like food and transportation, has yet to fully materialize.

And with wage growth already slowing, that means many households will likely continue to tap into savings and take on debt to support spending, even after inflation peaks.

“I don’t think it’s going to be a great year for real disposable income growth,” said Stephen Stanley, chief U.S. economist at Santander US Capital Markets LLC. “And not everybody has the luxury of being able to maintain their spending patterns without getting into trouble.”

The Federal Reserve’s preferred inflation measure probably accelerated in May on a monthly and annual basis. Economists in a Bloomberg survey anticipate a 3.4% increase in the personal consumption expenditures price index excluding energy and food, which would mark the fastest year-over-year pace since October 2023.

Meanwhile, the government report set to be published Thursday will also likely show that consumers continued powering ahead, even after three months of declines in real disposable income.

Credit-card usage has been on the rise despite high interest rates, and the saving rate is currently at an almost four-year low. Higher-than-usual tax refunds thanks to President Donald Trump’s signature tax legislation have provided a temporary cushion.

At the 2026 Morgan Stanley US Financials Conference in New York City this month, Marianne Lake, who leads JPMorgan Chase & Co.’s consumer and community bank, said she’s monitoring the small but increasing number of people for whom wage growth isn’t keeping pace with price increases.

The recent drop in real wages at the national level was largely the result of the energy shock and the consumer continues to be surprisingly resilient, Lake said. But there are fewer buffers to future shocks, she added.

“It’s possible that, if inflation were to be higher for longer, that this sort of trend of wages keeping up with inflation could be at some risk,” she said.

Even before inflation picked up recently, wage growth had slowed from the highs of a few years ago. Back in the period known as the “Great Resignation,” workers left their jobs at unprecedented rates seeking higher pay and benefits elsewhere. But with demand for workers cooling since then, many are choosing to stay put, even if that means negligible wage gains.

Wage growth for people who switch companies — which tend to see bigger pay gains than those staying in the same job — is at an almost five-year low in the Atlanta Fed’s wage tracker.

“It’s not like people are trading up to higher-paying jobs like we saw in the Great Resignation era,” said Heather Long, chief economist at the Navy Federal Credit Union. “It’s this ongoing labor-demand cooling.”

In the few industries that have seen significant layoffs in recent years, chief among them technology, some have been forced to trade down. Before losing his job in early 2024, Jacob Trigg was making about $200,000 a year as a software project manager.

The Austin-based professional hasn’t been able to land a similar position despite sending over 1,000 job applications since then. Trigg has taken all sorts of jobs over the past two years, including in landscaping and agriculture, but those haven’t been enough to make ends meet.

“I live a completely different life now,” said Trigg, 42. “I was making $200,000 year, and I’ve taken jobs for $20 an hour for only a dozen hours a week. There’s absolutely no funds for anything other than bare-minimum expenses.”

Nationally, however, unemployment has remained low and after a year of near-zero job growth, the labor market has regained some hiring momentum. In addition, higher earners continue to enjoy the benefits of a booming stock market.

The relative job security is encouraging workers to keep spending even if they feel stretched thinner for now, according to Olu Sonola, head of U.S. economics at Fitch Ratings.

“The confidence from knowing that I have a job is enough for me to continue to spend,” Sonola said.

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—With assistance from Julia Fanzeres.

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