Bottom-Quartile Wage Growth vs. Inflation

Each month, American Default Research subtracts the 12-month CPI inflation rate from the Atlanta Fed's wage growth figure for the bottom wage quartile, then averages the monthly gaps over the year. For 2025 the average was 1.1 percentage points, down from 2.2 percentage points in 2024. A gap above zero means wage growth ran ahead of prices.

The wage side is the Atlanta Fed Wage Growth Tracker (1st Quartile): the median change in hourly pay for the same wage and salary earners a year apart, as a 12-month average. People are ranked by their own hourly wage, not households by income, and self-employed people and anyone without earnings at both interviews are left out. The price side is the all-items Consumer Price Index for urban consumers, the measure behind CPI Inflation; BLS says it may not match the inflation that particular groups of households face.

Neither the Atlanta Fed nor BLS publishes this gap; the subtraction and the yearly averages are American Default Research's calculation. It uses only the bottom wage quartile, so it does not compare low earners with high earners. It also differs from BLS's Real Earnings series, which adjusts average hourly earnings from the payroll survey for inflation.

Both sources revise their numbers, so published yearly gaps can change. The Atlanta Fed's September 2026 revision shifted the 2022 gap by about 0.2 point, so this page treats a year-to-year change of 0.2 point or less as about the same. The 2025 figure averages 11 months, because October 2025 data were never collected during the federal government shutdown. A Census change to how top earnings are coded entered the wage data in April 2024; the Atlanta Fed judged its effect likely modest.