Inflation Dampens Household Purchasing Power Despite Brighter 2026 Outlook

Real income growth for U.S. households remained unusually weak heading into the holiday season, even as economists upgraded their outlook for next year’s economic expansion, according to a new report from the JPMorganChase Institute.
Median real income growth for Americans aged 25 to 54 slowed to 1.6 percent in October, a pace comparable to the soft labor market recovery in the 2010s following the Great Recession, the Nov. 25 analysis shows.
“With pandemic-era excess cash liquidity in the rearview mirror, consumers are facing a holiday spending season with budgets tempered by tepid income growth but augmented by strong stock market gains,” the report states. “Importantly, nominal growth remains roughly consistent with pre-pandemic levels, but real purchasing power gains are at a relatively low level because of the higher pace of consumer price increases.”…