real income
Purchasing power measure
Real income is earnings or revenue adjusted for inflation—what your money can actually buy rather than just the dollar amount.
If wages rise 3% but prices rise 5%, real income has fallen.
Economists distinguish real income from nominal income (the raw number) to measure actual purchasing power over time: Real incomes have stagnated for decades despite rising nominal wages.
- inflation rateSpeed of rising costs
- cost of livingPrice of basic necessities
- sticker shockDistress from unexpected expense
- price stabilityConsistent general price levels
- purchasing powerEconomic spending ability
wage growth · bread and butter · making ends meet · paycheck to paycheck · living standards · GDP · employment rate · savings rate · interest rates · consumption patterns · economic mobility · economic cycles · Social Security · fiscal policy · paycheck · living wage · monetary policy · productivity