Chart No. 202
Macro
6 min read
Free
Wages are cooling faster than rents.
Pay growth is back near 3.6%. Rent inflation is not following as fast, and that gap is where the next squeeze on consumers sits.
Nadia Brennan
Founder and editor
Illustrative data based on public sources.
Atlanta Fed wage tracker · CPI rent
Wage growth in the United States has slowed to 3.6% a year, from a peak of 6.7% in 2022. Rent inflation, measured in the consumer price index, has slowed too, but more slowly.
The squeeze in between
For the median renter, pay rose faster than rent for most of the last two years. That gap is closing. On current trends, rent will again take a larger share of income by the spring.
Why the index lags
Official rent inflation follows new leases with a delay of about a year, because most tenants renew at old prices. Market rents for new leases have been flat. The official number will follow them down, just later than consumers would like.
Not investment advice. Carry writes about markets; it does not tell you what to buy or sell. Charts use illustrative data unless a source says otherwise.
