The pressure on paychecks has dampened consumer spending, which has been rising by less than one percent so far this year, or about the pace of population growth. Because consumer purchases account for about 70 percent of the U.S. economy, the tepid pace of household spending could pose a serious threat to an already weak recovery.
"With worker pay stagnant, why are so many surprised that consumer spending is going nowhere?" asked economist Joel Naroff at Naroff Economic Advisors in a recent note to clients. "How can consumers lead the way if they don't have the means to purchase more goods? They cannot."
To be sure, there are pockets of strength, as new home buyers step back into the market after a deep, protracted collapse in sales. This year, car dealers have posted some of their strongest months since the Great Recession. On Wednesday, Ford, GM and Chrysler reported double-digit sales gains for August, putting the industry on track for its strongest month since just before the start of the recession in 2007.
But those big ticket purchases may simply divert spending from other categories, according to National Retail Federation CEO Matthew Shay.
"People are making decisions and choices," he told CNBC. "They can spend on some of the things we're seeing, on autos and homes, or they can spend on other places. They're sort of choosing either/or."
Hard choices have dampened the back-to-school shopping season this year. Families with school-age children told an NRF survey they planned to spend less on clothing, school supplies and electronics, and some 80 percent said they were spending cautiously because of the sluggish economy.
Major retailers from Wal-Mart to Macys are already warning that the slower spending pace will extend into the second half of the year.
(Read more: Wal-Mart sales slip, outlook 'cautious' )
There are also signs the strong rebound in housing may be tapering, following an increase in borrowing rates. In July, consumers cut spending on big-ticket items like appliances, according to the government's latest data.
Tepid wages aren't the only thing keeping American consumers from opening up their wallets more freely. Many are still having a hard time getting credit after a borrowing binge in the mid-2000s left them deep in hock or with badly damaged credit scores.
With the exception of car loans, secured by a repossessable vehicle, lenders have been skittish about extending more credit. And many households are still working to pare down debt. Credit card lending is rising by about 1 percent—again, roughly the pace of population growth.