How Much Will Inflation Impact Your Salary in 2026? Experts Weigh In

Core Insights - Inflation is affecting the purchasing power of salaries, with 75% of Americans reporting rising prices [1][2] - The average inflation rate has been 3.25% annually over the last century, with the most recent Consumer Price Index (CPI) at 3.97% [3][4] - The Federal Reserve's expansion of the M2 money supply by about 40% in 2021 led to significant inflation, which is now stabilizing around 4.5% year over year [5] Impact on Salaries - Workers are likely to experience a "double cost" of inflation, where essential prices rise faster than wage increases, leading to increased stress in negotiating higher wages [6] - Even when companies do raise pay, these increases often do not keep pace with inflation due to employers managing their own rising costs [6] Recommendations for Workers - Workers are advised to take a proactive approach by reviewing their compensation early in the year and preparing data on market pay rates and performance results [7]