As the current inflation rates continue, more and more households are finding it harder to make ends meet in-between paychecks. In fact, the recent increases in the cost of living have led to over half of all US residents living paycheck to paycheck.
At A Glance
- The increased cost of living is putting a finacial strain on over half the households in the US.
- Almost two-thirds of all Americans are currently living paycheck to paycheck, reports say.
- Wage growth isn’t keeping up with the increased costs of living.
- Some areas within the US consider a $120,000 household income to be low-income.
US Inflation Making It Harder For US Households To Make Ends Meet
According to reports, growth in wages has hit a high based on past rates. However, this growth is not keeping up with the steadily increasing cost of living. A cost that is increasing at the fastest pace we have seen in about four decades. As of now, as many as 64% of Americans are living paycheck to paycheck.
“Wages are up 5.1% over the past year,” notes Mark Hamrick Bankrate.com senior economic analyst.
“Which is trailing the pace of inflation,” Hamrick continues. “Indeed, surging prices are stealing the show on the minds of consumers.”
Increased Wages Are Not Keeping Up With Inflation Rates
With wages increasing at a slower pace than inflation rates, the funds don’t go as far as they used to. Particularly since many of the inflation increases we are facing are happening at the grocery store and the gas pump. These, of course, are two spending areas in which families may find it difficult to cut corners since both fall under the necessity category in households.
“We are all seeing the cost of everything shooting up,” says LendingClub’s financial health officer Anuj Nayar. But, Nayar notes, this doesn’t quell the sting we all face at the grocery store or gas pump.
“You’ve got to eat, you’ve got to commute,” Nayar notes. “These are not discretionary expenses.”
The Percentage of Households Living Paycheck to Paycheck Is Similar to Pandemic Rates
As 2022 began as many as 64% of the U.S. population were struggling, living paycheck to paycheck. This number increased since December 2021 when 61% of the U.S. population were operating paycheck to paycheck.
The current numbers also reflect the rates from the pandemic months when 65% of U.S. households were struggling to make ends meet between paychecks. Even households pulling in six figures have found themselves struggling in these trying times with nearly half of these households finding difficulty between paydays.
“Depending on where you live, $100,000 may not get you that far,” Nayar notes.
According to reports, there are currently, 48% of U.S. households making six-figure incomes that are living paycheck to paycheck. This is up from the 42% of six-figure earners who struggle between paychecks.
