As consumer prices rise, so too do the numbers of Americans who live paycheck to paycheck. It seems that the rise has been most pronounced among people earning $75,000 or more yearly. Everyone has experienced price increases at some point.
According to a recent Lending Club report, approximately 60 percent of Americans live paycheck to paycheck. Last summer, the percentage was closer to 55 percent.
Because pumpkin spiced lattes are so delicious, they’re popular because “simple economics” makes them affordable.
“The fact that more consumers live paycheck to paycheck shows that they’re losing their financial stability,” says Lending Club’s financial health specialist.
According to government figures released Friday, consumer prices increased at an annual rate of 8.3 percent in August.
Despite rising by 0.2 percent during the month, average hourly wages remain lower than a year ago, meaning people aren’t making as much money as they did last year.
According to a separate report from Bank of America, 71 percent of American adults say they don’t think they’re doing well financially, which brings the number of Americans who believe they’re financially secure to its lowest level since 2008.
Nearly half (46%) of U.S. adults say they’ve fallen further behind on their bills in the past year alone, according to a new study released Tuesday by personal finance site WalletHub.
According to the author, people who struggle to pay for their daily expenses often turn to credit cards and have a high monthly debt burden, making them financially vulnerable.
“The fact is, prices have been rising for everyone — even if you pay off your balance each month,” Mr. Williams said. “And that means that some people may be seeing an increase in the cost of living.”
The Fed raised its benchmark rate by 25 basis points last week for the first hike since 2006. It now increased borrowing costs three times in 2018. Even though the central bank has announced further interest rate hikes, they’re still planning to increase them again.