Real earnings rose at an annual pace of 0.2% in May. Don’t doze off. It’s more important than it sounds.

Nobody’s going to notice an increase in spending power of one-fifth of one percent, especially after two years of high inflation that slashed spending power. But the trend is once again going in the right direction, and it could be a crucial inflection point.

Real earnings, or income adjusted for inflation, have been falling since April 2021. That’s most of Joe Biden’s presidency. It’s no secret why. While nominal earnings growth has been positive during that time, inflation has risen by more, which means a dollar of income buys less. This is one of the best ways of measuring whether working families are getting ahead or falling behind. They’ve been falling behind.

The trend finally reversed in May, when real earnings rose 0.2% from a year earlier. Part of the reason for the improvement is inflation, which has dropped from a peak of 8.9% last year to 4% in May. The pace of growth in nominal income dipped during the same time frame, but not as much as the decline in inflation. Economists expect real income to improve further as long as the labor market stays strong and inflation continues to abate.

A sustained improvement in real income could be the thing that finally pulls consumer attitudes out of the dungeon. The University of Michigan’s consumer sentiment index has been at recessionary levels for the last two years, correlating closely with the onset of high inflation and falling real incomes. To some extent it’s been a puzzle why consumers are so gloomy amid historic levels of job growth and the end of the oppressive COVID pandemic. But if your paycheck consistently buys less, it’s hard to be chipper.

[Drop Rick Newman a note, follow him on Twitter, or sign up for his newsletter.]

Biden could certainly use the lift that might come from diminishing inflation and growing purchasing power. His approval rating has been stuck in the low 40% range for the last year, with voters giving him no apparent credit for record levels of job creation during his presidency. Biden regularly talks up the strong job market and other things that are going right, but it doesn’t seem like voters are buying it.

There are still 16 months until the 2024 presidential election, and that’s plenty of time for the story on inflation and its effects on living standards to change. If current trends continue, inflation could be back near the Federal Reserve’s target of 2% a year from now. Incomes are finally catching up with inflation, and if incomes run ahead of inflation for the next year, consumers will be making up lost ground and regaining some or much of the purchasing power they’ve lost.

Will inflation be a big issue in the 2024 election? It’s certainly been a crucial element of Biden’s presidency so far. High gas prices compelled Biden to release record amounts of oil from the nation’s reserve, and inflation has forced the Federal Reserve to hike interest rates at one of the fastest paces on record. Those moves might still have negative effects that haven’t materialized yet.

It's plausible, however, that inflation will be an afterthought in the home stretch of the election, next summer and fall. Republicans have been hammering Biden on inflation, but if workers keep gaining ground into 2024, those attacks on Biden might miss the mark. A tiny improvement in incomes can become a large one if it compounds month after month.

Rick Newman is a senior columnist for Yahoo Finance. Follow him on Twitter at @rickjnewman

Click here for politics news related to business and money

Read the latest financial and business news from Yahoo Finance