Americans’ cost of living fell relative to their earnings on average in 2016. Even though inflation ticked slightly upward, average wages grew faster. The Consumer Price Index, which measures price changes in goods and services, rose 1.7 percent. That was still low in historical terms but the second highest annual increase in the past five years. But the 2.9 percent increase in average wages was the largest wage gain over that five-year period.
Cost of Living
With energy prices and a strong dollar keeping inflation low, the average American’s cost of living did not rise in 2015 and in fact fell relative to wages. As this research brief shows, however, some Americans are spending large amounts on services such as education and health care and have seen their cost of living continue to rise.
Economic Education Bulletin
Vol. XXIX, no. 11 | November, 1989
by the Editorial Staff