WASHINGTON — Working-class Americans are faring well financially despite elevated inflation caused by the Iran war — with their wage gains significantly outpacing inflation over the past year, according to an analysis of data released this week.
In the second quarter of 2026, ending in June, those at or below the national median income reported big gains, beating the inflation rate of 3.5%, the Wall Street Journal reports.
Earners at or below the median saw weekly wage gains of 4.6% over the past year. Those at or below the 25% percentile — meaning the poorest quarter of workers — had weekly pay jump 5.5%, the Bureau of Labor Statistics records showed.
The White House celebrated the data as evidence of President Trump’s policies working as intended.
“President Trump pledged to deliver economic relief for the American people after four years of Joe Biden’s malfeasance and incompetence. The proven Trump economic agenda of working-class tax cuts, rapid deregulation, and energy abundance is delivering,” said White House spokesman Kush Desai.
Another White House official noted that aside from wages, last month’s Consumer Price Index report, which showed a dip in energy costs — before the war resumed — had other promising indicators, including a 2.5% annual drop in prescription drug prices, after Trump browbeat pharmaceutical companies into lowering rates to align with other major countries.
The wage findings have significant political and economic ramifications — with economists telling the Journal that it could explain growing consumer spending, which has helped keep the broader economy strong despite jumping energy prices caused by Iran’s months-long closure of the Strait of Hormuz.
It also indicates that the pain of inflation isn’t being felt as bitterly by lower-income Americans, who typically are hit hardest due to having less discretionary income.
Trump’s tax cuts on overtime, tips and Social Security benefits generally are claimed when filing taxes — meaning the beginning of the year.
Democrats are leading Republicans in polls ahead of the November midterm election, which will dictate control of Congress during Trump’s final two years in office — with the race testing the resilience of Trump’s 2024 coalition, which included big gains among Hispanics and the working class.
Some of Trump’s best-known policies have unclear contributions to lower-end earnings, including his mass-deportation campaign targeting illegal immigrants, who can compete with citizens for jobs that do not require higher education.
Trump has aggressively used tariffs to boost US exports and domestic manufacturing, but neither have yet notched significant gains in federal data.
Although real income gains are reported for the bottom half of earners, the picture is less rosy slightly higher up the ladder.
Middle-to-upper-middle class wages haven’t kept up with inflation — with the benchmark for the 75th percentile improving just 1.5% over the past year.
Trump has catered his political message to this demographic by frequently mentioning the roaring stock market, driven by the artificial intelligence boom, which has lifted 401(k) retirement accounts.
Top earners, whose status is more difficult to assess from the BLS quarterly data, are still doing well.
Bank of America data cited by the Journal show that annual wage gains are still strongest among the upper third of workers who use the bank. The lowest third is effectively tied — both beating inflation — and is trailed by the middle third.
