NORFOLK, Va. — Workers across Hampton Roads have seen a rise in their average salary growth rate in the last couple of years, according to a report by Automatic Data Processing.
But that still leaves a big gap between how much workers are making and how much things cost with a sky-high inflation rate.
Between gas stations and grocery stores, everywhere you go lately, prices are high.
But with an average of almost a 7% salary increase in Hampton Roads in the last two years according to ADP, that should help, right? Wrong.
Right now, the inflation rate sits at 9%, the highest in 40 years.
ADP reports from 2019 to 2021, the average salary growth rate in our area was 6.78%, slightly higher than the national average of 6.77%.
"Right there off the bat, you’ve got about a three percentage point gap," said Peter Shaw, a retired TCC business administration professor.
Add in taxes and that gap grows to about a five percentage point gap.
Shaw said he and other economic experts believe the inflation rate has peaked.
"If it has peaked, it’s still gonna take a long time to come back down. We’re well into 2023," he said.
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As for a recession, Shaw said he believes there is a 60% to 70% chance we could see a recession in 2023.
"The business community is holding their breath," he said. "Now in the next quarter, if things turn around, that’ll change the game."
He said until then, you may need to cut back to make every dollar count. He recommends dividing up your needs and wants and cutting back on as many "wants" as you can.
"Use it as a buffer against the price increases of your needs," he said. "Your medical, your shelter, your food, your transportation, any debt."
He said he hopes and believes the inflation rate will drop to at least 6% by the end of the year.
"That'll show that we're going in the right direction."
But he said only time will tell.