### Summary
🇺🇸 61% of Americans are living paycheck to paycheck, according to a new report.
### Facts
- 📊 About three-quarters of consumers earning under $50,000 and 65% of those making $50,000 to $100,000 were living paycheck to paycheck in June.
- 💰 45% of those making over $100,000 reported a paycheck-to-paycheck existence.
- 💸 Inflation, rising interest rates, and inadequate savings are cited as factors contributing to financial stress.
- 😰 52% of respondents reported feeling more financially stressed than before the COVID-19 pandemic.
### Summary
The chief global economist at Piper Sandler has warned that the U.S. economy is set to worsen before improving, and Americans should save money and maintain their savings. Rising everyday prices, declining manufacturing activity, excessive government spending, and a tight labor market are all contributing factors.
### Facts
- Americans are spending $709 more on everyday goods in July compared to two years ago.
- One-third of U.S. households spent more than 30% of their income on housing in 2021.
- Excessive government spending is blamed for high prices.
- The declining birth rate and closure of maternity wards indicate that Americans are postponing having children.
- Inflation is a major challenge for the economy, and a recession will put pressure on all wealth groups.
- The economist argues that the fiscal stimulus from the Inflation Reduction Act has had a "counterproductive" impact on controlling inflation.
- To see an economic turnaround by 2025, the private sector needs to drive capital spending, while curbing government spending and reforming entitlements is necessary.
- The economist hopes for sustained low inflation and increased labor force participation but emphasizes the need for tough decisions in Washington.
- The economist believes that the U.S. needs to get its fiscal house in order to become a leader in the global economy.
The US economy is in an overheated state, with declining manufacturing activity, high everyday prices, and a tight labor market, causing Americans to feel a significant cost of living crunch and prompting a warning that they should "hunker down" and be cautious with their finances, according to global economist Nancy Lazar. Excessive government spending is blamed for the high prices, and an impending recession is expected to add further pressure on all wealth groups. To achieve economic recovery, Lazar emphasizes the importance of private sector-driven growth and the need for reduced government spending and entitlement reform.
Fresh signs of stress in U.S. consumer spending are emerging as retailers like Macy's and Foot Locker lower profit forecasts, indicating that middle-income Americans are spending less due to high living costs and existing card debt.
Job creation in the US slowed in August, indicating that the strong economy could be starting to weaken under pressure from higher interest rates. Private employers added 177,000 jobs, well below the previous month's total of 371,000. Pay growth also slowed, suggesting more sustainable growth as the effects of the pandemic recede. Investors and economists remain uncertain about the future of US inflation and whether the economy can continue to grow without a significant slowdown.
The US economy grew at a slower pace in the second quarter than previously estimated, which is seen as a positive sign for the Federal Reserve's efforts to cool demand and curb inflation.
A study shows that over 60% of Americans are living paycheck to paycheck despite the Federal Reserve's efforts to control inflation, as prices for goods and services continue to rise.
Inflation and rising interest rates have forced a majority of Americans, across all income brackets, to live paycheck to paycheck, with lower-income individuals being the hardest hit, according to a survey from Lending Club Bank.
Despite the cooling inflation rate, the cost of goods and services in the United States has significantly increased, making it more expensive for the majority of workers to live, which contributes to their unhappiness about the economy.
A CNBC survey found that 74% of Americans are feeling financially stressed, with inflation, rising interest rates, and a lack of savings being the top stressors, making it difficult for many workers to contribute to their retirement plans.
Despite increased household wealth in the US, millions of households are struggling financially due to inflation, high interest rates, and rising living costs, which have led to record levels of debt and limited access to credit.
American workers are facing a decline in median annual household income due to high inflation, with 17 states experiencing a decrease while only five saw an increase, according to data from the Census Bureau. The labor market remains challenging, with wages rising but not enough to keep up with inflation.
The U.S. economy is experiencing a higher share of working-age people in the workforce than ever before, and despite some inflationary concerns, the country is not at risk of a recession, according to economist Betsey Stevenson.
Approximately 60% of Americans are living paycheck to paycheck, facing financial challenges due to high inflation, higher interest rates, and stagnant wage growth.
Inflation is impacting Americans across the country, with the Miami-Fort Lauderdale-West Palm Beach metro area experiencing the highest increase in consumer prices at 7.8%, followed by Denver, Atlanta, Seattle, and Detroit, according to WalletHub. Housing prices are a major driver of high inflation in cities like Miami, and while experts anticipate a gradual cool-down of prices, patience is needed.
The share of US adults with decreasing incomes has increased, indicating a cooling labor market, with high- and middle-income households and the West region being most affected, according to a survey by Morning Consult.
The rate of pay increases for job switchers in the US has slowed to 9%, the lowest rate since June 2021, with the difference between wage growth gained by leaving a job versus staying at its slimmest margin since October 2020, according to data from ADP.
The September jobs report shows a robust job market, but rising inflation and slow wage growth are making Americans feel worse about the economy.
Despite positive economic indicators such as job growth and low unemployment, the perception of a healthy economy is overshadowed by the high cost of living, including inflation, rising housing prices, and increased interest rates.
Financial anxiety is becoming increasingly prevalent as inflation rises and the cost of living surpasses wages, impacting mental health and quality of life for billions worldwide.
More than half of Americans are struggling to pay their bills as high costs, inflation, and stagnant or declining incomes continue to make consumers angry and dissatisfied.
Despite making more than $100,000, many Americans still struggle with financial hardships, highlighting the prevalence of living paycheck to paycheck.
Headline inflation is expected to have eased in September, while pay growth is slowing, with economists predicting that annual inflation fell slightly to 6.5% from 6.7% in August, although it still remains well above the Bank of England's 2% target, and the jobs market weakening and reducing the need for employers to increase wages.
The resilient US consumer and strong job market are boosting consumer spending, which could lead to more Fed rate hikes and upside risks to inflation entering the fourth quarter of 2023.
Economists have raised their US growth projections and reduced recession odds to a one-year low due to strong consumer spending supported by a still-robust labor market, despite high borrowing costs and inflation.
