After a period of high inflation and higher utility rates, Americans are now just in a survival phase. In August, 60% of adults said they were living paycheck to paycheck, according to a report from LendingClub.
Recent data paints a mixed picture of the state of the economy. Inflation has shown some signs of slowing, but the consumer price index, which measures the cost of various goods and services, still increased by 3.7% from a year ago, based on August readings by the United States Bureau of Labor Statistics.
Those higher prices have impacted workers' wages. Average minimum income actually decreased 0.5% for the month, according to the United States Department of Labor in a separate statement.
Because salary growth cannot keep up, household members find it increasingly difficult to manage their lives.
The Federal Reserve maintained interest rates at the end of the latest policy meeting but Fed Chair Jerome Powell said the central bank wanted to see more progress in its efforts to fight inflation. This leaves the possibility of another benefit rate increase this year.
Central bankers have increased the interest rate by 11 times, pushing the Fed's interest rate into the target range of 5.25% to 5.5%, the highest level in more than 22 years.
Soaring housing costs, food and living expenses are putting pressure on household budgets on top of higher utility costs for credit card debt and car loan payments, said Sophia Bera Daigle, Chief Executive Officer and founder of Gen Y Planning, a financial planning firm in Austin, Texas.
Low-income workers are the most affected by rising prices, especially for food and other necessities, as those expenses make up a larger share of the budget, according to the study.
Another report shows that about 70% of Americans say they are stressed about finances, according to a CNBC Financial Confidence survey conducted on March, mainly due to inflation, rising benefit rates and savings shortages. Only 45% of adults say they have an anxiety fund. For those with anxiety savings, about 26% said they had less than $5,000 in savings.
