Is your raise keeping up with inflation? How to calculate your real raise

If you got a raise this year, one number tells you whether it actually made you better off: your raise minus inflation. This guide shows you how to work that out with official Bureau of Labor Statistics (BLS) data, check it against what employers are paying out across the country, and use the answer at your next pay review.

The short version: prices rose 3.7% in the 12 months ending September 2026, according to the latest Consumer Price Index (CPI) release. So a raise below roughly 3.7% over that period lost ground, unless you live in a region where prices rose more slowly.

Quick reference: the numbers to compare your raise with

Sources: BLS CPI news release (published October 14, 2026), BLS Employment Cost Index summary (published July 31, 2026) and BLS Real Earnings summary (published October 14, 2026).

Two updates are close. BLS scheduled the September 2026 ECI for October 30, 2026, and the October 2026 Real Earnings release, which applies the newest CPI data, for November 10, 2026. If you are reading this after those dates, swap in the newer numbers using the same steps below.

Nominal vs real raises

Your nominal raise is the one on your pay letter: say, 4%. Your real raise is what is left after inflation takes its cut. If prices rose 3% over the same stretch, your real raise is about 1%. If prices rose 5%, you took a real pay cut of about 1%, even though your paycheck got bigger.

That is the whole idea. Everything else in this guide is about picking the right inflation number and the right time period.

What counts as "your raise"

Before you calculate anything, decide which pay you are measuring. Most people should start with base pay: your annual salary, or your hourly rate times your usual hours. It is the cleanest comparison because it does not jump around with one-off payments.

Then think about the rest of your package separately:

• Bonuses and commissions. A bigger bonus this year is real money, but it may not repeat. Compare it on its own rather than folding it into your raise.
• Overtime and shift differentials. If your rate went up but your overtime hours fell, your take-home pay might be flat. Compare the rate first, then total earnings.
• Equity. Stock grants change value with the share price, so they are hard to compare with a price index. Treat them as a separate line.
• Benefits. If your share of health premiums rose, some of your raise went straight back out. Your employer's benefit costs are tracked in the ECI, but no BLS series measures your personal out-of-pocket change. You will need your own pay stubs for that.

Finding the right inflation figure: CPI and regional CPI

The standard inflation measure is the CPI-U, the Consumer Price Index for All Urban Consumers. BLS says the population it covers represents more than 90% of people in the US. It tracks prices for things people buy day to day, from rent and groceries to gas and doctor visits.

For a raise comparison, use the 12-month percent change, not seasonally adjusted. That is the headline "over the year" figure in each monthly release, and it is the series the BLS calculator uses.

Regional CPI: what BLS publishes, and what it does not

Prices do not rise at the same speed everywhere, so a regional figure can be a better yardstick. BLS publishes CPI data for:

• The 4 Census regions: Northeast, Midwest, South and West.
• 9 Census divisions, such as New England, South Atlantic and Pacific.
• 23 metro areas, including Atlanta, Boston, Chicago, Dallas, Denver, Houston, Los Angeles, New York, Phoenix, Seattle and Washington, plus urban Alaska and urban Hawaii.

There is no state-level CPI. If your state has no listed metro area, use your region or division. You can find all of them on the BLS CPI regional resources page.

Timing differs too. BLS collects most prices every month in the three largest areas but every other month elsewhere, so some metro releases skip months. If you scan BLS's list of local CPI releases, you will see that some metro areas show a newer month than others. Use the newest month your area has.

Here is how far apart two regions were in the latest releases:

The Midwest and West regions publish their own monthly releases too, so look yours up rather than assuming it matches the national figure.

One caveat: a regional index measures how fast prices are changing in that area, not how expensive the area is. BLS says plainly that area indexes do not compare price levels between cities. So a lower number for the South does not mean the South is cheaper; it means prices there rose more slowly over the year.

Step by step: calculating your real raise

You need four things: your old pay, your new pay, the date the raise took effect, and the CPI change over the matching period.

1. Write down your pay before and after. Use annual base salary or hourly rate. Example: $62,000 before, $64,170 after.
2. Work out your nominal raise. New pay divided by old pay, minus 1. $64,170 ÷ $62,000 = 1.035, so 3.5%.
3. Pick your period. The fairest test is backward-looking: did the pay you have now keep up with the prices you have paid since your last raise? Use the 12 months from your last raise to the latest CPI month.
4. Find the CPI change for that period. For a 12-month window ending in a recent month, the release gives you the percentage directly. For any other window, use the index levels or the calculator (see the next section).
5. Calculate your real raise. Divide (1 + raise) by (1 + inflation), then subtract 1. With a 3.5% raise and 3.7% inflation: 1.035 ÷ 1.037 = 0.998, so about minus 0.2%.
6. Turn it into dollars. Multiply your old pay by (1 + inflation) to get the salary that would have exactly kept pace. Compare that with your new pay.

A quick shortcut: raise minus inflation gets you close (3.5% minus 3.7% is minus 0.2%). The division method is more accurate when the numbers are large, but for typical raises the gap is tiny.

Worked example (hypothetical)

This is an illustration, not a real person. Say you earned $62,000 in September 2025 and got a 3.5% raise that took effect that month, taking you to $64,170. You want to know whether that raise held up through September 2026.

The September 2026 CPI release lists the US city average index at 324.800 for September 2025 and 336.940 for September 2026. Using those exact index levels:

• Inflation over the period: 336.940 ÷ 324.800 = 1.0374, or about 3.7%.
• Salary needed to keep pace: $62,000 × 1.0374 = about $64,317.
• Your actual salary: $64,170.
• Shortfall: about $147 a year.
• Real raise: 1.035 ÷ 1.0374, minus 1 = about minus 0.2%.

So the raise felt like progress, but in buying-power terms you finished the year roughly where you started, slightly behind.

Now run the same raise against regional inflation. Using the rounded regional figures, a 3.5% raise works out to:

Same raise, different result. That is why the regional figure is worth the extra minute.

Quick lookup: common raises against 3.7% inflation

Using the BLS CPI inflation calculator

The BLS CPI Inflation Calculator does the index math for you. It uses the CPI-U US city average for all items, not seasonally adjusted, so it matches the headline series.

How to use it for a raise:

1. Enter your old salary in the dollar box.
2. Set the first month and year to when your previous pay rate started.
3. Set the second month and year to the latest month available (or the month your new raise took effect, if you are judging it at that point).
4. Click calculate. The result is what your old salary would need to be today to buy the same things.
5. Compare that figure with your current salary. If yours is higher, your raise beat national inflation over that window.

Things to watch:

• October 2025 is missing. BLS notes it could not collect October 2025 CPI data because of a lapse in appropriations, and the calculator will not run calculations that use that month. If your raise started in October 2025, use September or November 2025 instead and say so if you share the result.
• It is national only. For a regional or metro comparison, take the index levels from your area's release and divide them yourself, as in the worked example.
• Monthly noise. A single month can swing, as gasoline did in September 2026 when BLS said it drove more than half of the monthly rise. Comparing the same month a year apart smooths most of that out.

How your raise compares with the Employment Cost Index

The CPI tells you whether your raise kept up with prices. The Employment Cost Index (ECI) tells you whether it kept up with what other employers are doing.

BLS describes the ECI as a measure of the change in employers' hourly labor costs over time. It tracks a fixed mix of jobs, so it is not thrown off when workers shift between industries or occupations. That makes it a decent stand-in for "the going rate of pay increases," though it measures employer costs, not individual raises.

In the 12-month period ending June 2026, wages and salaries rose 3.2% for civilian workers, 3.1% in private industry and 3.4% for state and local government. A year earlier, the civilian figure was 3.6%. After adjusting for inflation, BLS says private industry wages and salaries fell 0.4% over the year and state and local government wages fell 0.1%.

The ECI also breaks private wages down by type of work. This is where you can get closer to your own job:

Source: BLS ECI Table 9, not seasonally adjusted.

How to read it for yourself:

• Your raise above your group's ECI figure: you did better than the broad market for your kind of work.
• Your raise below it: your employer may be paying increases below the pace in your field. That is useful context for a review, not proof of anything about your own role.
• Sales roles: the ECI includes incentive pay for some sales jobs, so the figure can swing with commissions. BLS also publishes a version that excludes incentive-paid occupations.

Keep the periods straight. The latest ECI covers the year to June 2026, while the latest CPI covers the year to September 2026. If you are comparing the two, say which periods you used. The cleaner comparison is BLS's own inflation-adjusted ECI, which divides each ECI index by the CPI-U for the same quarter.

What BLS real earnings data shows

BLS also publishes a monthly Real Earnings release, which takes average hourly earnings from its payroll survey and adjusts them for inflation. For all private-sector employees it uses the CPI-U; for production and nonsupervisory workers it uses the CPI-W, an index weighted toward wage earners and clerical workers.

The September 2026 figures:

• Real average hourly earnings for all employees fell 0.7% from September 2025 to September 2026.
• Because the average workweek grew 0.6% over that time, real average weekly earnings fell by a smaller 0.1%.
• For production and nonsupervisory employees, real average hourly earnings fell 0.6% over the same 12 months.

What this means for you: if your real raise came out slightly negative, you are not alone. On average, hourly pay did not keep pace with prices over that year. It also shows why hours matter. If you are paid hourly, more hours can protect your weekly income even when your rate lags inflation.

A limit worth knowing: these are averages across the whole workforce, so they shift when the mix of jobs changes. Your own before-and-after calculation is still the number that matters most for your situation. For more context on raises over time, see our pay trends coverage.

Using the result at review time

A real-raise calculation turns "I feel like I'm falling behind" into a specific, checkable number. Use it as context. Your strongest case is still what you deliver and what the market pays for your role.

Before the meeting

• Bring three numbers: your nominal raise, CPI for your area over the same period, and the ECI figure for your occupational group.
• Bring evidence of value: projects shipped, targets hit, new responsibilities, skills added since your last raise.
• Check market pay for your role, not just the rate of increase. A raise can beat inflation and still leave you below the going rate. Our salaries by role pages can help.
• Know your number. Decide what salary would restore your buying power, and what you would ask for on top of that based on performance.

Short scripts you can adapt

If your raise trailed inflation:

"I appreciate the increase. I ran the numbers, and over the past year prices in our region rose faster than my raise, so my pay buys a bit less than it did. Given what I took on this year, I'd like to talk about getting to [specific salary]."

If your raise trailed the ECI for your field:

"BLS data shows wages for [occupational group] rose about [X]% over the latest year. My increase was [Y]%. Can we look at whether my pay is keeping pace with the market for this role?"

If the answer is "the budget is fixed":

"Understood. If base pay can't move now, could we set a date to revisit it, or look at a one-time bonus or a title review with a pay change attached?"

Mistakes to avoid

• Mismatched periods. Comparing a raise from January with CPI for a 12-month window ending in September overstates or understates the gap.
• Using core CPI because it looks better. Core inflation leaves out food and energy, which you still pay for. Use all-items CPI for your own buying power.
• Treating a regional index as a cost-of-living ranking. It measures the speed of change, not price levels.
• Leading with inflation alone. Employers rarely set raises to match CPI. Inflation supports your case; it rarely makes it on its own.
• Promising yourself an outcome. Data improves your odds of a good conversation. It does not guarantee a result.

If your pay is set by a union contract or a public pay scale, the raise schedule is usually fixed in writing. In that case, talk to your union representative or HR about how increases are negotiated and when the next round opens. More scripts are in our negotiation section.

What to do next

• Pull your last two pay letters or pay stubs and note the effective dates.
• Open the CPI inflation calculator, enter your old salary and dates, and compare the result with your current pay.
• Check whether your metro area or region has its own CPI and rerun the math with it.
• Look up your occupational group in the latest ECI release. After October 30, 2026, use the September 2026 figures.
• Write one sentence that sums up your result, such as "my raise was 3.5%, regional prices rose 4.2%," and keep it ready for your next review.