Ian Patrick, FISM News
The pain of inflation is hitting Americans’ wallets harder than expected, according to a new report from PYMNTS in collaboration with LendingClub.
PYMNTS unveiled their findings on January 30 in a paper titled “New Reality Check: The Paycheck-to-Paycheck Report – December 2022.” The report states that by last December, 64% of Americans were “living paycheck to paycheck.”
“At the end of 2022, 9.3 million more U.S. consumers were living paycheck to paycheck than the year before, with 8 million of these consumers earning more than $100,000 per year,” the report states.
The reason for this increase comes back to the biting costs of inflation, according to the consumers themselves.
“As we move into 2023, inflation and economic uncertainty remain top concerns for most U.S. consumers,” the report states. “In the past 12 months, increasing prices for everything from groceries to fuel have weakened consumers’ spending power.”
Even with the overwhelming feeling of inflationary prices, 4 out of 10 consumers expect an improvement in their personal finances by the end of 2023. Another third expects that their situations will not change within the same time frame, while 27% expect their situations to worsen.
“Not surprisingly, high-income consumers — those annually earning more than $100,000 — are the most likely to think their financial situations will improve,” the report adds.
Another interesting statistic shows that there is an equal level of hope regarding income upkeep for those who are and aren’t struggling to pay their bills while living paycheck to paycheck. 42% of those who aren’t struggling say their incomes will keep up with inflation, while 40% of those who are struggling believe this to be true.
The reason behind this optimism rests in jobs and their benefits. In fact, “one-third of paycheck-to-paycheck consumers cite job upgrades and additional sources of income as drivers of optimism” according to the report.