Inflation outpaced wage growth, eroding real earnings by 0.71% despite nominal hourly pay rising to $37.53 in May 2026.
The median American full-time worker earned $1,235 weekly in early 2026, or $64,000 annually before taxes and deductions. After federal income tax, Social Security, Medicare, and other withholdings, take-home pay dropped to roughly $850 per week, a 31% reduction.
Nominal average hourly earnings rose to $37.53 in May 2026 from $36.28 a year earlier, but inflation at 4.25% erased all gains, pushing real earnings down 0.71%. Savings rates fell to 3.7% from 5.8% in mid-2024 as households dipped into reserves to cover rising costs.
Federal income tax for a single filer at the median income level totaled about $5,526, or 8.6% of gross pay, while combined Social Security and Medicare withholdings added another 7.65%. State taxes and health premiums further reduced disposable income.