Home Business A majority of Americans live paycheck to paycheck

A majority of Americans live paycheck to paycheck

by Ana Lopez
0 comment

Inflation continues to affect US wallets.

About 64% of U.S. consumers (166 million) say they live paycheck to paycheck, according to a new research by LendingClub in collaboration with PYMNTS. That number is 3% higher than last year.

And it’s not just middle-income Americans struggling to pay their bills.

Surprisingly, 51% of consumers who earned more than $100,000 also said they live paycheck to paycheck.

“While the number of Americans living paycheck to paycheck is close to the highs we saw in the midst of the pandemic, the causes appear to be very different as the economy is out of place as it was in 2020,” said Anuj Nayar, financial health officer at LendingClub.

Nayar pointed to inflation and the Fed’s efforts to curb it as a reason for consumer status from paycheck to paycheck as debt continues to mount.

Americans remain optimistic

Despite the dire news, many consumers remain paycheck to paycheck optimistic that things will change for them. According to the survey, four in ten expect their money situation to improve next year – an increase of 7 percentage points from the 33% in July 2022.

Why the positive vibes? Paycheck-to-paycheck consumers believe that promotions and side deals will help them make more money in the coming year.

But Nayar expressed concern that this kind of magical thinking could slow economic recovery.

“If consumers’ perceptions that their incomes will improve this year are correct, it will hamper the Fed’s effects to curb inflationary pressures,” Nayar said. “We can expect more and more Americans of all incomes to self-identify as living wages until we see the economy recover. Now more than ever, it is critical for consumers to examine their spending and build a buffer of savings to prepare on the unexpected.”

Most Americans agree and shy away from buying large items in 2023. Many in the survey said they wouldn’t buy expensive OLED TVs and smart fridges this year. They also expect to take fewer holidays. Only 35% of consumers said they would travel for pleasure in 2023.

You may also like

About Us

Latest Articles