Business & Finance

U.S. salary increases forecast to average 3.5% in 2027 amid inflation pressures

A survey of 1,000 employers shows businesses focusing limited raise budgets on top performers and specific industries.

Updated Sep 1, 2026 · 20:20 UTC1 reports

The short version

U.S. employers are projected to offer average salary hikes of 3.5% in 2027, according to a survey by professional services firm Marsh.
The projected growth rate sits close to recent annual inflation of 3.4%, raising concerns that some workers will see real wages decline.
Companies are moving away from broad raises, directing compensation budgets toward top performers and sectors like tech and banking over industries like retail.
Most surveyed organizations have yet to finalize their formal 2027 compensation budgets.

A Marsh survey of 1,000 U.S. organizations found average salary increases for 2027 are forecast at 3.5%, including merit, promotions, and cost-of-living adjustments.[CBS News]
U.S. consumer prices increased at an annual rate of 3.4% in July.[CBS News]
Projected average salary increases vary by sector, with tech companies forecasting 3.8% and banking forecasting 3.7%.[CBS News]
Compensation data from Payscale and Marsh indicates employers are targeting pay hikes toward strong individual performers rather than distributing raises evenly.[CBS News]

Most employers surveyed by Marsh have not yet finalized their formal compensation budgets for 2027.[CBS News]
The future trajectory of inflation remains uncertain, though economists generally expect it to moderate through 2027.[CBS News]