by John Hugh DeMastri
As inflation continues to batter consumers, the number of Americans living paycheck to paycheck climbed to 60% in August, according to a Friday report from financial services company LendingClub.
The increase, up from 57% in September 2021, was driven primarily by a greater portion of six figure earners slipping into a paycheck-to-paycheck lifestyle, according to the LendingClub report. While the proportion of those earning less than $50,000 and those between $50,000 and $100,000 living paycheck to paycheck stayed roughly the same, at 73.6% and 62.4% respectively, earners between $100,000 and $150,000 saw a more than 6.5% increase to 43.8% living paycheck-to-paycheck.
“Fewer consumers not living paycheck to paycheck indicates that consumers are continuing to lose financial stability,” LendingClub said. “Yet, the share of consumers living paycheck to paycheck with issues paying their bills has dropped 7 percentage points in the same period. Many have moved to what now may constitute a stable lifestyle: living paycheck to paycheck without difficulty paying bills.”
— PYMNTS (@pymnts) September 29, 2022
Between March 2021 to August 2022, real wages have fallen each month, with real average hourly earnings falling by 2.8% annually as of August. Inflation has remained consistently high, roughly 3 to 4 times higher than the Federal Reserve’s goal of 2%.
The cost of food, which hit its highest rate in more than 40 years in August, was felt disproportionately by those already struggling to pay their bills, with 75.8% of those struggling to pay bills while living paycheck to paycheck believing increased prices for food were “very or extremely considerable.” In contrast, those living paycheck to paycheck but comfortably paying bills and those who did not live paycheck to paycheck reported the same feeling at a rate of 68.3% and 66.9% respectively.
“With inflation expected to continue, it will likely press consumers of all financial lifestyles further,” LendingClub reported. “[T]ime will tell how well they continue to adapt.”
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John Hugh DeMastri is a reporter at Daily Caller News Foundation.
Photo “Couple Paying Bills” by Mikhail Nilov.