(The Center Square) – A growing number of Americans are living paycheck to paycheck despite increasing wages, a newly released report found.
PYMNTS and Lending Club released the report, which says that 61% of Americans are living paycheck to paycheck, an increase of 7 points since May 2021. The report also found 54% of Baby Boomers and seniors are living paycheck to paycheck.
“Even in late 2021, with COVID-19 refusing to recede from the public consciousness, the economic toll is being aggravated by the steady rise in prices that has persisted since the spring,” the report said. “The inflation spike that is weighing on consumers’ moods underscores the needs consumers will have, which may include accumulating disposable cash and available credit. How consumers resolve their temporary financial obstacles will vary from one person to the next. Some may moonlight at a second job, while others may negotiate new terms with some creditors and another group may decide that a short-term loan will best help them persevere.”
The report, which surveyed 3,000 people, found that for members of Generation Z living paycheck to paycheck, their average savings comes in at $1,158.
The high number of struggling Americans comes against the backdrop of several troubling economic factors.
The Department of Labor released new jobless data Thursday which showed 248,000 first-time unemployment claims, a significant increase despite experts’ predictions that the number of new claims would decrease.
“The highest insured unemployment rates in the week ending January 29 were in Alaska (2.7), California (2.7), New Jersey (2.6), Minnesota (2.5), Rhode Island (2.4), Massachusetts (2.3), New York (2.3), and Illinois (2.2),” DOL said. “The largest increases in initial claims for the week ending February 5 were in Michigan (+2,884), New Jersey (+406), Kansas (+309), Delaware (+235), and Maryland (+148), while the largest decreases were in California (-4,247), Kentucky (-3,962), Tennessee (-2,916), Illinois (-2,303), and Indiana (-1,760).”
Meanwhile, the Bureau of Labor Statistics released its Consumer Price Index (CPI) data, a major marker of inflation. That data showed prices rose a significant 0.6% in January, the latest in an ongoing surge in inflation that has pressured workers and employers across the country.
“The all items index rose 7.5 percent for the 12 months ending January, the largest 12-month increase since the period ending February 1982,” BLS said. “The all items less food and energy index rose 6.0 percent, the largest 12-month change since the period ending August 1982. The energy index rose 27.0 percent over the last year, and the food index increased 7.0 percent.”
According to Thursday’s report, consumers are feeling the pinch from higher prices.
“The price hikes have even extended into the discount retail segment. Consider that Dollar Tree recently announced a 25% price hike,” the report said. “Most of its items now will cost $1.25. The price increases, however, are not deterring most Americans from their willingness to fork over extra cash when shopping or buying dinner. As PYMNTS’ research has shown previously, many consumers are ready to return to prepandemic shopping habits once the health crisis fades.”