Employers are projected to grant average salary increases of 3.5% in 2027, including merit raises, cost-of-living adjustments, promotions and other pay increases, Marsh found in a survey of 1,000 U.S. organizations. Most companies have not finalized their budgets, but the estimate suggests many workers could struggle to keep pace with inflation if consumer-price growth remains near July’s 3.4% annual rate. Marsh compensation expert Mark Bowling said salary increases have moderated since 2023 and companies are concentrating limited compensation budgets on retention and business priorities rather than evenly distributing raises. Payscale described this shift as a move away from broad "peanut-butter" raises toward stronger increases for top performers. Marsh projected average raises of 3.8% in high tech and 3.7% in banking, while workers in sectors such as retail could receive increases below inflation. Economists generally expect inflation to ease this year and in 2027.