The math
The measure is the Consumer Price Index for All Urban Consumers (CPI-U), U.S. city average, all items, not seasonally adjusted (BLS series CUUR0000SA0). The index was 323.976 in August 2025 and 334.980 in August 2026. 334.980 / 323.976 = 1.0340, so prices rose 3.40%.
To see what a new salary is worth in last year's dollars, divide it by 1.0340.
Worked example*: $60,000 and a 3% raise
$60,000 x 1.03 = $61,800. $61,800 / 1.0340 = about $59,770 in last year's dollars. That is about $230 less than the $60,000 you started with, even though the paycheck is $1,800 bigger. To break even, the raise had to be about 3.4%, or roughly $2,040 on $60,000.
| Raise | New salary | Worth in last year's dollars | vs $60,000 |
|---|---|---|---|
| 2% | $61,200 | $59,190 | -$810 |
| 3% | $61,800 | $59,770 | -$230 |
| 3.4% | $62,040 | $60,002 | about even |
| 4% | $62,400 | $60,350 | +$350 |
| 5% | $63,000 | $60,930 | +$930 |
The salary is made up. It shows the method, not your pay.
What rose most over the same 12 months
| Category | Aug 2025 | Aug 2026 | Change |
|---|---|---|---|
| Gasoline | 282.358 | 359.738 | +27.4% |
| Electricity | 298.738 | 310.057 | +3.8% |
| Food away from home | 384.909 | 397.868 | +3.4% |
| All items | 323.976 | 334.980 | +3.4% |
| Rent of primary residence | 436.981 | 448.997 | +2.7% |
| Food at home | 314.608 | 321.500 | +2.2% |
| Motor vehicle insurance | 894.075 | 848.231 | -5.1% |
BLS CPI-U, U.S. city average, not seasonally adjusted. Computed from our basket data file. The all-items rise is the average of a national mix. If gasoline is a big part of your budget, your own rate was higher than 3.4%.
How pay compared
Average hourly earnings of private employees rose about 3.1% over the same 12 months, from $36.62 to $37.76 (BLS, as used in our wages vs inflation post). That post covers the longer picture since 2019. This page is only the one-year number and a way to test your own raise.
Limits
3.4% is a national average, not your own rate. A raise in hourly pay does not equal a change in total pay if your hours or benefits changed. Taxes also take a share of a raise. The CPI is the standard published measure of price change, not a perfect one. The wages post uses the seasonally adjusted CPI series, which shows 3.35% for the same period, so its figures differ slightly from the ones here.
How to check your own raise
Enter your raise and what you spend in the free Raise vs Inflation tool. Nothing you type leaves the page.
Common questions
What counts as a good raise? One above your own price rise. The national figure for the last 12 months is 3.4%.
Is CPI the right yardstick? It is the standard published measure. It is an average, so it will not match every household.
Is a raise below 3.4% a pay cut? In buying power terms on the average basket, yes. Your paycheck number still went up.
Is this advice? No. It explains a calculation.
Asterisk note
*Hypothetical example, not a real salary. Educational only, not financial advice.
Related
Are wages keeping up with inflation in 2026?
Raise vs Inflation tool
Why your own prices may have risen more than the 39% headline
Sources
U.S. Bureau of Labor Statistics: Consumer Price Index. Series used: CUUR0000SA0 (all items), CUUR0000SETB01 (gasoline), CUUR0000SEHF01 (electricity), CUUR0000SEFV (food away from home), CUUR0000SEHA (rent of primary residence), CUUR0000SAF11 (food at home), CUUR0000SETE (motor vehicle insurance). August values from the BLS public data API.
BLS average hourly earnings, total private, series CES0500000003, via FRED.