"One can not stress enough how awful that is - more than a decade without real earnings growth", he said in comments he was due to make at a news conference.
"We have certainly not seen a period remotely like it in the last 70 years and quite possibly the last hundred".
But instead of splurging this money on giveaways to make life easier for the "just about managing" families - known in Whitehall as the "Jams" - whom Mrs May has identified as a priority for support, the Chancellor allocated the bulk of it to projects created to boost productivity and economic growth in the long term.
"Given the still very considerable uncertainties over the direction of the economy, (Hammond) may well find he needs all of the headroom he has left himself", Paul Johnson, director of the Institute for Fiscal Studies, said.
Britain is now in line for "an additional dollop of austerity" in the 2020s, the think tank warned.
A chart from the Resolution Foundation, which looks at low pay, suggested the fall in real wages in the 10 years to 2021 would be the biggest since about 1810.
The shift in forecast since March means real GDP per household is more than £1,000 lower in 2021 than expected.
"One can not stress enough how terrible that is - more than a decade without real earnings growth".
The outlook for family finances is a "grim picture" with little respite from measures announced in the Autumn Statement, a think tank has said.
During the Second World War people accepted the sharp decline in living standards because they knew that their way of life was under existential threat from continental fascism.
"In the months and years ahead there is going to have to be more help for low income working families", he told BBC Radio 4's The World at One.
He said it was striking that Mr Hammond had not responded to calls for more money for the NHS or social care but suggested "he won't be able to do that for much longer".
But the Chancellor chose to prioritise "jam tomorrow" in the form of greater investment rather than "jam today" for the "just-about managing" (JAMs) or public service, Mr Johnson added.
"This lost decade for living standards is unprecedented in modern British history and is a damning indictment of the total, abject failure of the Tories" economic policy during their six wasted years in office.
That could mean the squeeze on living standards could be worse during this Parliament than between 2010 and 2015. New fiscal rules give Hammond 27 billion pounds of leeway to support the economy if needed.
"We've already seen that we've got worse off".