It’s official: Consumer price gains are outpacing workers’ pay.

Prices in April surged 3.8% compared to a year ago, government data released Tuesday showed, while average hourly earnings rose 3.6%.

“Inflation is now eating up all wage gains for the first time in about three years,” Heather Long, chief economist at the Navy Federal Credit Union, posted on X. “This is painful for Americans and a true financial squeeze.”

Joe Brusuelas, chief economist at RSM, added: “When you start talking about the middle class, working class, working poor, they’re actually going to be feeling the brunt of this. What this means is that their living standards are in decline at this point.”

This change in fortune for American wage earners will surely have political ramifications.

Since taking office, President Trump and his team have frequently referenced the notion of “real wages” — wage gains measured against the losses inflicted by inflation — to argue that things for Americans are getting better under his watch.

The effort is meant to draw a contrast with former President Joe Biden, who oversaw inflation outpacing wage growth for much of his term and paid a political price for it.

Trump had overseen a different situation in his second term, but an extended reversal in the purchasing power of everyday Americans could similarly hurt his political fortunes, especially with the midterm elections just a few months away.

Democrats immediately seized on the issue.

Sen. Elizabeth Warren of Massachusetts said Tuesday that “with inflation outpacing wage growth in April ... Trump’s failed economic policies aren’t just raising costs, they’re shrinking families’ paychecks.”

Brusuelas also nodded to the political ramifications, estimating that even as Americans enjoy nominal wage gains of around 3.5%, inflation could mean their purchasing power declines over the next three to four months. “To me, this is what the public and the political authority (are) going to be focusing on," he said.

Emma Ockerman is a reporter covering the economy and labor for Yahoo Finance. You can reach her at emma.ockerman@yahooinc.com.

Ben Werschkul is a Washington correspondent for Yahoo Finance.

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