Why Your Raise Gets Eaten by Energy Costs

Wages and Prices with Fexingo: Cost of Living, Pay Raises, and Workers' Purchasing Power · May 31, 2026 · 5m · transcript

In this episode of Wages and Prices, Lucas and Luna explore a frustrating economic puzzle: wages are growing faster than inflation, yet most workers don't feel richer. The culprit? Energy costs. With the Iran war pushing gasoline and home heating expenses up, the average household is spending an extra $450 per year on energy alone — undoing much of the real wage gain. Lucas breaks down the data: average hourly earnings are up about 1.1% in the last month, but core PCE inflation is running at 3.3% annually. Meanwhile, the 10-year breakeven inflation rate sits at 2.38%, suggesting markets…