More than half of Americans with six-figure salaries were living paycheck to paycheck last year as high inflation hit household budgets, according to a disturbing study released this week. Admitted.
As of the end of December, 51% of Americans making $100,000 or more said they were living paycheck to paycheck, according to a survey conducted by LendingClub and Pymnts.com. That share was up 9% from his year ago, when 42% of six-figure earners admitted the same.
Overall, a whopping 64% of US consumers (equivalent to 166 million Americans) say they live on a very small monthly budget. This is up from 61% (about 9.3 million) compared to last year’s survey results.
Of the 9.3 million Americans who join the monthly battle, 8 million earn more than $100,000.
“The impact of inflation is eating into every American’s wallet, and as the Fed’s efforts to curb inflation drive up the cost of debt, record numbers of Americans are living paycheck-to-paycheck. ” said Anuj Nayar, Head of Financial Health at LendingClub.
“The number of Americans living on a paycheck is close to the highs seen in the middle of the pandemic, but the economy hasn’t taken shelter in place like it did in 2020, so the cause is It seems very different,” Nayar added. .
Inflation has eased slightly in recent months, but remains a major pressure on US households. Overall, prices in December rose by 6.5%, while grocery prices rose by nearly 12%, according to the Consumer Price Index.
The service index, which includes housing, transport and health care, rose 7% over last year.
The survey found that the percentage of Americans who said they had trouble paying their bills jumped to 24% in December, up 2% from the same month a year ago.
Among six-figure income brackets, 16% said they struggled to pay their bills.
Despite some improvement in inflation, many Americans are still pessimistic about the economy. Only four in 10 Americans who admitted to living paycheck to paycheck expect their earnings to catch up with inflation this year.
Additionally, 90% of respondents said they had virtually no pay raises due to price increases last year.
“Until the economy recovers, we can expect more and more Americans of all incomes to identify themselves as living paycheck to paycheck,” Nayer added. “More than ever, it is important for consumers to consider their spending and build a cushion of savings for the unexpected.”
The survey is based on responses from approximately 4,000 US adults between December 8th and December 22nd.
Data released by the Department of Commerce last week showed a decline in consumer spending in December. This shows that Americans are holding off on purchasing due to the effects of inflation.
Americans will be watching closely this week when the Federal Reserve decides to raise another rate. Fed officials have suggested they will continue to raise rates until inflation is dealt with, despite fears of a slowing economy.