Millions of Americans earning $100,000 live paycheck to paycheck: survey

More than half of six-figure earners in America admitted to living paycheck to paycheck last year as high inflation hit households, according to a disturbing study released this week.

According to a survey conducted by LendingClub and Pymnts.com, as of the end of December, 51% of Americans with an annual income of $100,000 or more said they lived paycheck to paycheck. The share was up 9% from a year earlier, when 42% of six-figure earnings made the same recognition.

Overall, a whopping 64% of US consumers, equivalent to 166 million Americans, said they live on a meager budget every month. This is 61% more than the previous year, or about 9.3 million people.

Of the 9.3 million Americans who join the monthly struggle, 8 million earn more than $100,000.

“The effects of inflation are eating into every American’s wallet, and as the Fed’s efforts to curb inflation increase the cost of debt, we are seeing a near-record number of Americans living paycheck to paycheck,” said Anuj Nayar, financial specialist at LendingClub.

“While the number of Americans living paycheck to paycheck is close to what we saw in the midst of the pandemic, the reasons appear to be very different as the economy is not stagnant as it was in 2020,” Nayar added. . .

Inflation has eased slightly in recent months, but remains the main source of pressure on US households. Overall, prices rose 6.5% in December, while groceries jumped almost 12%, according to the consumer price index.

The index of services, which includes housing, transportation and medical care, rose by 7% compared to last year.

The proportion of Americans who said they were having trouble paying their bills jumped to 24% in December, up 2% from the same month a year earlier, according to the survey.

In the six-figure income group, 16% said they were struggling to pay their bills.

Despite some improvement in inflation, many Americans remain pessimistic about the economy. Only four in 10 Americans who have admitted to living paycheck to paycheck expect their incomes to match inflation this year.

In addition, 90% said their pay rise was almost offset by higher prices last year.

“We can expect more and more Americans of any income to consider themselves living paycheck to paycheck until we see an economic recovery,” Nayar added. “Now more than ever, it’s important that consumers check spending and build up a savings buffer to prepare for the unexpected.”

The survey results are based on responses from nearly 4,000 American adults between December 8 and 22.

Last week, data released by the Commerce Department showed a decline in personal spending in December, a sign that Americans are cutting back on purchases due to the impact of inflation.

Americans will be watching closely this week as the Federal Reserve makes its next rate hike decision. Fed officials have signaled that rate hikes will continue until the inflation problem is resolved, despite fears of an economic slowdown.