A
year's worth of inflation-adjusted wage gains vanished in just four
months, leaving workers little better off than when President Trump
returned to office.
Why it matters: The reversal shows how the recent energy-driven inflation surge
is eating into household purchasing power. Real pay for rank-and-file
workers is up just 0.1% since Trump took office in January 2025.
Rising
real wages helped underpin the White House's case that the economy was
improving. That advantage has now largely disappeared.
By the numbers:
After rising for much of 2025, real wage growth has effectively stalled
across the labor market. Inflation-adjusted hourly earnings for all
private-sector workers are unchanged from last January.
Earnings for production and nonsupervisory workers — a widely used proxy for private-sector working-class employees —are up just 0.1% over that time frame.
Zoom in:
Average hourly earnings for production and nonsupervisory workers — a
widely used proxy for private-sector working-class employees — have
risen a cumulative 4.9% since January 2025.
But inflation, as measured by the Consumer Price Index, is up just as much over the same period.
Flashback: Exactly a year ago, White House officials highlighted this gauge as evidence that working-class Americans were seeing their paychecks stretch further.
Now, by this measure, real pay has given back nearly all of those gains.
What to watch: Inflation was 4.2% for the 12 months through May, the fastest pace since April 2023.
The surge was driven in large part by higher energy prices linked to the Iran war.
The silver lining:
Inflation looks so far contained to energy-related sectors, rather than
bleeding to other household purchases as economists feared.
What they're saying: "The
numbers were great," Trump said in the Oval Office, responding to a
question about whether he was concerned about the inflation data
released earlier on Wednesday.
"I love the inflation," Trump said, later adding that oil prices were "going to come down like a rock" once the war ends.
The other side:
"President Trump has always been clear about the fact that oil and gas
prices — and thus overall inflation — will rapidly drop as soon as the
Iran situation is resolved," White House spokesperson Kush Desai said in
a statement.
He added that before the start of the Iran
war, American workers had recovered a significant portion "of the real
wage losses they experienced under Joe Biden, thanks to this
Administration's commonsense agenda of deregulation, tax cuts and energy
abundance."
People grab sacks of flour from a moving lorry carrying World Food Programme aid in Gaza in November 2025. Photograph: Abdel Kareem Hana/AP
US-Israel war on Iran driving historic levels of global hunger, UN says
Conflict and cuts in funding have left World Food Programme ‘taking from the hungry to feed the starving’
The continuing US-Israel war on Iran
has compounded other global disasters to drive record numbers of people
into hunger at a time when funding to combat famine has fallen
dramatically, the deputy head of the UN World Food Programme has said.
The WFP says 363 million people
around the world are now at risk of acute hunger, 45 million of them as
a result of conflict in the Middle East and the consequent oil price
spike.
The surge in need comes against the backdrop of a cut in funding last year by a third, with the US, the largest donor by far, cutting its contribution by more than half.
Carl
Skau, who will become the WFP’s acting executive director on Monday
when Cindy McCain steps down for health reasons, said the huge gap
between needs and funding had forced the organisation to cut programmes
supporting populations in food emergencies so as to focus on those
already facing catastrophic famine.
“We take
from the hungry to give to the starving. That’s the reality,” Skau told
the Guardian. “Much of this is driven by conflict. Last year, we had two
famines declared. That hasn’t happened in decades, so these are
historic levels of hunger.”
The two famines
declared in 2025 were in Gaza and Sudan. The situation in Gaza has
improved slightly since the October ceasefire, while Sudan continues to
be the world’s worst humanitarian crisis, with pockets of famine
persisting in parts of Darfur and South Kordofan.
“On
the funding side, we had a drop of nearly 40% year on year,” Skau said,
adding that it immediately affected staffing levels, particularly in
Afghanistan and Yemen, where the Trump administration has cut off all
emergency food funding. “We had to let go of 5,000 people. In
Afghanistan, it’s meant we went from supporting 10 million to 2 million.
It was a huge, huge drop last year.”
More
than 300 million people were already facing acute hunger globally before
the US and Israel started a war with Iran in February, which led to
Tehran closing the strait of Hormuz and then a US counterblockade on Iranian shipping.
The
WFP estimated earlier in the Iran war that if oil prices remained above
$100, 45 million more people would face acute food shortages. The price
of Brent crude fell below that benchmark in mid-May, but only after
weeks in March and May when it was well above $100. It still costs 30%
more than its prewar average and could rise again.
The
war and the Hormuz closure have had several effects on global hunger
and the WFP’s capacity to prevent people from dying from famine. Most
directly, it drives up food prices, mostly because of transport costs.
“The
price of food and energy is so closely correlated that in some places
if the price of energy goes up 30%, food inflation almost meets that,”
Skau said. “In a least developed country, amongst the most vulnerable,
they’re already spending all their money on food, and so that means they
eat 30% or 40% less.”
The spike in oil prices
also directly affects WFP efforts to get food to the most desperately
hungry. More of its operating costs have to go towards transport, and
some aid routes have been blocked.
For example, border tensions with the Taliban government
in Afghanistan in recent months led Pakistan to close border crossings,
blocking the usual route for food aid. The Gulf conflict has since
closed its second longest border, with Iran, so the WFP has had to
resort to long and costly land routes.
Skau
said 85,000 tons of food aid intended for Afghanistan had been stuck on
the Pakistan border for months, then rerouted to Dubai, only to be stuck
there when the Iran war broke out. The WFP then sent it through Turkey
and across the Caspian Sea and Turkmenistan. It was due to arrive last
week, seven months late.
The oil price hike
and the inflationary surge it has sent across the world also affects the
willingness of donor countries to fund the WFP. Total donor
contributions had already dropped from $9.8bn in 2024 to $6.5bn in 2025.
In that period, US funding fell from $4.4bn to $2.1bn, while UK
contributions declined from $610m to $435m. This year, the estimated
funding needs are $13bn but only $2.8bn has so far been received.
Those
are all immediate impacts on hunger of the Iran war, and it is already
creating severe problems for next year by cutting the supply chain for a
third of the world’s seaborne fertiliser.
“In
east Africa, all their fertiliser comes from the Middle East, and they
don’t have the capacity nor the resources to buy elsewhere,” Skau said.
“So that means that if this continues, there is going to be none, and
eastern Africa is now heading into the planting season, so we will see
the impact on productivity six or nine months from now.”
Beyond
the immediate impact of the Iran war, Skau pointed to the corrosion of
international norms that had made the work of humanitarian workers like
WFP staff more dangerous than ever. More than 1,000 humanitarian workers have been killed while doing their job over the past three years.
Iranian-backed Houthi forces are still holding 38 WFP workers they detained last year on unsubstantiated espionage allegations, leading the organisation to suspend operations in Houthi-controlled areas.
“We
really feel this broader sense of a challenge to the rule of law,” Skau
said. “We feel it at the checkpoints, and the drone wars have been
terrible. We’re losing more colleagues than ever, and it’s very
difficult with attribution – we can’t point to exactly who did what –
and certainly there is no accountability. It’s never been more
dangerous.”
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