Number Of Americans Living Paycheck To Paycheck Jumps 7 Percent, Report Shows

Casey Harper (The Center Square).

According to a new report, Americans live paycheck-to-paycheck despite rising wages.

PYMNTS released the report along with Lending Club. It found that 61% Americans now live from paycheck to paycheck. That’s an increase of 7 percentage points over May 2021. According to the report, 54% of Boomers and senior citizens are still living paycheck-to-paycheck.

“Even in late 2021, with COVID-19 refusing to recede from the public consciousness, the economic toll is being aggravated by the steady rise in prices that has persisted since the spring,” the report said. “The inflation spike that is weighing on consumers’ moods underscores the needs consumers will have, which may include accumulating disposable cash and available credit. Each person will have a different approach to overcoming temporary financial difficulties. Some may moonlight at a second job, while others may negotiate new terms with some creditors and another group may decide that a short-term loan will best help them persevere.”

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According to the survey of 3,000 respondents, Generation Z members who live paycheck-to-paycheck have an average savings of $1,158.

In the face of many troubling economic factors, there is a high proportion of Americans who are in trouble.

The Department of Labor released new jobless data Thursday which showed 248,000 first-time unemployment claims, a significant increase despite experts’ predictions that the number of new claims would decrease.

“The highest insured unemployment rates in the week ending January 29 were in Alaska (2.7), California (2.7), New Jersey (2.6), Minnesota (2.5), Rhode Island (2.4), Massachusetts (2.3), New York (2.3), and Illinois (2.2),” DOL said. “The largest increases in initial claims for the week ending February 5 were in Michigan (+2,884), New Jersey (+406), Kansas (+309), Delaware (+235), and Maryland (+148), while the largest decreases were in California (-4,247), Kentucky (-3,962), Tennessee (-2,916), Illinois (-2,303), and Indiana (-1,760).”

In the meantime, data from Bureau of Labor Statistics on Consumer Price Index (CPI), which is a significant indicator of inflation, was released. According to that data, prices rose by 0.6% in Jan. It is just one more example of the ongoing rise in inflation which has strained workers and employers all across the nation.

“The all items index rose 7.5 percent for the 12 months ending January, the largest 12-month increase since the period ending February 1982,” BLS said. “The all items less food and energy index rose 6.0 percent, the largest 12-month change since the period ending August 1982. The energy index rose 27.0 percent over the last year, and the food index increased 7.0 percent.”

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According to Thursday’s report, consumers are feeling the pinch from higher prices.

“The price hikes have even extended into the discount retail segment. Consider that Dollar Tree recently announced a 25% price hike,” the report said. “Most of its items now will cost $1.25. The fact that prices have risen is not enough to deter most Americans from spending more on their meals and shopping. As PYMNTS’ research has shown previously, many consumers are ready to return to prepandemic shopping habits once the health crisis fades.”

This article was Syndicated by permission of The Center Square.