There may be some comfort for those who have been hurt by increasing pricing.
According to a recent LendingClub research, fewer Americans today claim to be living paycheck to paycheck. In July, 59% of Americans reported living paycheck to paycheck, down from 61% in June but still higher than in July of last year, when 54% of individuals reported feeling stretched too thin.
Studies suggest that lower-income workers have been particularly severely hit by price increases this year, especially for food and other necessities since those costs make up a larger portion of the budget. According to LendingClub’s data, in July, almost 75% of consumers with yearly incomes of under $50,000 and 63% of those with annual incomes of between $50,000 and $100,000 were living paycheck to paycheck.
Wealthier Americans feel less financially stressed even though high incomes have also been having trouble making ends meet, the study revealed. About 30% of people who made $200,000 or more reported living paycheck to paycheck, down from 36% the month before.
Indications that shows inflation may be reaching its peak
The recent indications that inflation has peaked and may be slowing down are great news for Americans who are struggling to make ends meet.
After average gas prices dropped below $4 for the first time since March and are currently down to $3.85, the consumer price index report for July finally revealed that customers’ costs for a range of products and services had begun to decline.
According to the U.S. Bureau of Labor Statistics, this led to an increase in real, inflation-adjusted average hourly earnings of 0.5% for the month.
Still, more than half of all American consumers find it difficult to maintain their standard of living, which forces some of them to depend more on credit cards or deplete their savings, leaving them exposed to debt.
“Inflation in the last year, let alone the last decade, has made it much more difficult for consumers to save while staying on top of their expenses,” stated Anuj Nayar, director of financial health at LendingClub.
“Not only are consumers saving less every month, but they are likely to encounter an emergency expense, if not multiple, putting them at a greater risk for increased financial hardship,” Nayar added. “This fact paves a financially difficult road ahead for consumers.”
Inflation is still close to its highest level since the early 1980s, so the Federal Reserve is hiking interest rates to slow it down even more.
Up until there are definite indications of a retreat, the U.S. central bank has said further hikes are on the way.