More than half of Americans earning six-figure salaries admitted they lived paycheck to paycheck last year as high inflation took a toll on households, according to a troubling study released this week.
As of the end of December, 51 percent of Americans with annual incomes of $100,000 or more said they were living paycheck to paycheck. Survey conducted by LendingClub and Pymnts.com.. The share is up 9 percent from a year ago, when 42 percent of six-figure earners took the same admission.
Overall, a whopping 64% of US consumers – that equates to 166 million Americans – said they live on a razor-thin budget each month. That was up 61 percent, or about 9.3 million, from last year’s results.
Of the 9.3 million Americans who join the ranks of the monthly struggle, 8 million earn more than $100,000.
“The effects of inflation are eating away at every American’s wallet and as the Fed’s efforts to curb inflation drive up the cost of borrowing, we are seeing more and more Americans paycheck to paycheck closer to paycheck to paycheck.” living,” said Anuj Nair, financial health officer at LendingClub. .
“While the number of Americans living paycheck to paycheck is close to the highs we saw in the middle of the pandemic, the reasons appear to be very different, because the economy is not providing shelter,” Nair added. It’s like being back in 2020,” added Nair. .
Inflation has cooled slightly in recent months, but it is still a major source of pressure on American households. Overall, prices rose 6.5 percent in December, while food prices rose about 12 percent, according to the Consumer Price Index.
The services index, which includes housing, transportation and medical care, rose 7 percent from last year.
The share of Americans who said they were having trouble paying their bills rose to 24 percent in December, up 2 percentage points from the same month a year earlier, according to the survey. .
Within the six-figure income bracket, 16% said they struggle to pay their bills.
Despite some improvement in inflation, many Americans are still pessimistic about the economy. Only four in 10 Americans who have accepted Living Paycheck to Paycheck expect their incomes to keep up with inflation this year.
Additionally, 90% said their salary increases were effectively wiped out by higher prices last year.
“We can expect more and more Americans of all incomes who self-identify as living paycheck to paycheck until we get the economy back on track,” Nair added. ” “Now more than ever, it’s critical for consumers to review spending and build a savings cushion to prepare for the unexpected.”
The survey based its findings on responses from nearly 4,000 American adults between Dec. 8 and Dec. 22.
Last week, data released by the Commerce Department showed a decline in personal spending in December — a sign that Americans are cutting back on purchases due to the effects of inflation.
Americans will be watching closely this week as the Federal Reserve decides to raise another interest rate. Fed officials have indicated that rate hikes will continue until inflation is addressed — despite concerns about a slowing economy.
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