High inflation is reducing real household income, according to new data from the Organization for Economic Cooperation and Development (OECD).
In the first quarter, real income dropped by 1.1% across the OECD, as rising consumer prices cut into households’ real incomes, the Paris-based group reported.
Among G7 countries, inflation hit household purchasing power in France and Germany hardest, leading to real income drops of 1.9% and 1.7%, respectively.
However, Canada defied the trend, the OECD said, recording a 1.5% increase in real income — the highest growth in the G7. (Italy was the only other country in positive territory, with incomes up 0.3%.)
The rise in incomes for Canada was primarily driven by higher wages and other compensation, which offset the effects of inflation, the OECD said.