david and goliath fight

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.