A new report shows that the proportion of Americans who say wages are not living enough has increased by 2022. And most newcomers to this category are in the country’s higher income quintile. Bloomberg news.
Accordingly, regarding 64% of consumers, equivalent to 166 million people, cannot save any money because their wages are only enough to cover basic living expenses, according to a survey of 4,000 people by industry publication. Pymnts and LendingClub Corp from December 8 to December 23.
That’s a 3% increase from a year earlier, or 9.3 million Americans. In that group, regarding 8 million people earn more than 100.000 USD/year. These people live entirely on salary and will face immediate hardship if their source of income is interrupted.
The numbers reflect growing money stress in households as the cost of living rises, wages fail to keep pace and savings are drained by the pandemic.
The number of people struggling to pay their bills will also increase by the end of 2022, even those in the $100,000/year income group. Photo: Jeenah Moon/Bloomberg.
This can be easily seen when even blisters of eggs have become a symbol of inflation in the US, according to Guardian. By the end of 2022, prices were up 60% year-on-year, putting pressure on household spending across the country.
2023 is expected to bring even more pressure, with nearly half of survey respondents expecting earnings to keep pace with inflation.
“The outlook for consumer spending is bleak. Rising prices, eroding savings and a growing reliance on credit are weakening their ability to spend this winter. These dynamics will be further exacerbated by the negative effects of low stock prices and falling property values,” said Lydia Boussour, senior economist at EY Parthenon.
Other indicators also point to some degree of financial stress today. According to the latest survey by the University of Michigan (USA), consumer sentiment, although it has risen from the low of 2022, is still much lower than the pre-pandemic level. Fourth-quarter economic growth data released last week also showed a slowdown in household spending.
According to the US Bureau of Economic Analysis, inflation-adjusted disposable income remains below early 2020 levels, suggesting that real consumer income has not grown over the past three years.
LendingClub’s survey also shows that the number of people having difficulty paying their current debts tends to increase.
24% of respondents manage to pay their bills in December. Among the group earn more 100.000 USDper year, this rate increases from 11% to 16% following one year.
In many countries, the cost of gas, transportation, groceries and housing has skyrocketed. Despite the efforts of governments and economic organizations, inflation will continue to increase in 2022.
According to a survey from technology market research firm Numerator, nearly 60% of respondents said they plan to save more money by 2023. They prioritized this out of concern regarding inflation and economic recession can affect your pocket, according to CBS News.