The job market may be cooling from its pandemic-era highs, but there's one important metric where workers have finally notched a win. 

After two years of crushing inflation that wiped out most workers' wage gains, Americans are seeing a reprieve. Pay is finally rising faster than consumer prices, according to data from the Bureau of Labor Statistics. Average hourly pay has grown at an annual rate of 4.4% for the last three months, topping the Consumer Price Index, which rose at rate of 3% in June and 4% in May. 

The figures are encouraging to economists, who are increasingly hopeful the U.S. can avoid falling into a recession as wage growth remains strong enough to allow consumers to keep spending. Economists surveyed by the Wall Street Journal lowered their expectations of a recession in the next year to 54%, from 61%, while Goldman Sachs on Monday lowered the probability of a downturn to 20%.

Falling unemployment, a resilient housing market and a "boom in factory building all suggest that the U.S. economy will continue to grow," although more slowly, Goldman wrote.

What's more, the recent fall in inflation looks to be enduring, as the cost of many goods and services that drove up prices in 2021-22 ticks lower. Used car prices — a major driver of the cost surges in recent years — are falling as automakers produce more new vehicles and work out supply-chain issues. Just this week, Ford reversed a year of price hikes on its F-150 Lightning electric truck by cutting prices between $6,000 and $10,000 on various models. Tesla has also announced several price cuts on its popular vehicles.

Nationwide, gas costs about $3.50 per gallon, down from a peak of more than $5 last year. Grocery costs are growing more slowly, with prices on some items, such as eggs, falling 40% since the start of the year. Rents have plateaued in many cities and are beginning to fall in places like California and Florida, according to ApartmentList. And a report on digital spending by Adobe showed that online prices in June grew at the slowest rate in over three years.

"All in all, 'disinflation' is having its first annual anniversary, and more decline could be in store," Ben Emons of Newedge Wealth wrote in a recent research note.

To be sure, many categories of spending are still seeing rising prices. So-called core inflation, which excludes volatile food and energy prices, is growing at an annual rate of 4.8%. That's far faster than the Federal Reserve's 2% target, driven higher by burgeoning prices for services, such as travel, car insurance and child care. But the strong job market increases the odds the Fed can lower inflation without crushing consumers, some experts think. 

"The sustained decline in inflation is encouraging news for the U.S. labor market outlook," ZipRecruiter chief economist Julia Pollak said in a report. "It increases the likelihood that the Fed will be able to pause rate hikes after one final July increase, and gradually lower rates through 2024, encouraging private sector investment to pick up again. It also increases the likelihood that U.S. workers will finally receive real wage increases and see their purchasing power expand."

In:
• Inflation

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