One chart shows the US is a rare major economy where wages have been outpacing inflation

• Wages in the US are beating those in other rich democracies.
• Adjusting for inflation, Canada and the US are the only G7 countries where paychecks have increased since 2019.
• Inflation has slowed a lot since its high in 2022, with price increases driven mostly by housing and gas.

The United States is leading the world's richest democracies in real wage growth.

Data from the OECD shows that between 2019 to 2023, the United States and Canada saw their average wages increase by 5.2% and 3.6%, respectively, when adjusted for inflation.

Meanwhile, workers' pay in other G7 countries, a group of industrialized democratic economies, has not kept up with inflation, meaning their paychecks have effectively shrunk since 2019.

Italian average wages fell 5.7% between 2019 and 2023. Inflation in Japan this year has hit a 19-month high, marking a continuing trend of a weakened yen and dropping real wages in the country.

The OECD's measure accounts for the differences in cost of living and inflation to accurately compare someone's purchasing power between counties.

While Americans are still feeling the pain of inflation — largely due to housing, energy, and gasoline — overall price growth has slowed significantly from 2022 highs. As of January, inflation was 3% year-over-year, compared to a rise in the consumer price index of 1.8% in France and 2.4% in Canada.

Eggs have been a particular pain point in the US recently. The price for a dozen Grade A large eggs has doubled over the past year, the Bureau of Labor Statistics reported.

While inflation is slowing, the Federal Reserve has opted to hold on further interest rate cuts so far this year despite pressures from President Donald Trump to continue cutting.

Fed Chair Jerome Powell gave a policy report to the House Financial Services Committee in February expressing that "the economy is strong overall." He stated that his priorities in policy restraint were to keep prices stable and maximize employment.

While new jobs increased less than the forecast in January, unemployment crept down to 4%, low by historic standards. And overall, the real GDP in 2024 grew 2.3% year-over-year as consumer spending made up for losses in investment, the latest data said.

Economic data aside, Americans are split along party lines on the future of the economy in 2025. Per Pew Research's polls published this month, 64% of Democrats say the economy will get worse, and 73% of Republicans anticipate it will get better. A majority of people are optimistic about the costs of gasoline improving while also pessimistic about a hike in the cost of housing, food, and healthcare.

Trump ran on campaign promises of bringing grocery and gas prices down and installed pro-oil and gas cabinet members to execute his "drill baby drill" plan. It's unclear, however, whether companies will be able or willing to expand oil production beyond current record highs.

When it comes to food, Trump has since walked back his vow, saying lowering grocery prices is "very hard." Economists and companies have also indicated that Trump's proposed tariffs could increase prices for a variety of products.

In the meantime, Powell has stated that the central bank operates independently of politics and he continues to watch the markets closely before intervening.

"If the labor market were to weaken unexpectedly or inflation were to fall more quickly than anticipated, we can ease policy accordingly." Powell said to the House committee last week.