Rising costs have eroded the standard of living for most Americans.
As inflationary pressures continue, two-thirds of working adults said their financial situation was worse than a year ago, according to a recent report by Salary Finance.
To make ends meet, many are tapping into their cash reserves or go into debt.
Nearly three-quarters, or 72%, of consumers have less savings than a year ago, a jump from 55% who said the same in February, according to the report. And 29% said they had completely exhausted their savings. The report is based on a survey of 500 adults in August.
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The consumer price index, which measures the average change in the prices of consumer goods and services, increased more than expected again in September, still near the highest levels since the early 1980s.
The rising cost of living is bad news for workers, whose average hourly earnings fell 0.1% for the month on an inflation-adjusted basis and are down 3% from a year ago. is one year old, leaving more Americans to live paycheck to paycheck.
Now, 32% of adults say they regularly run out of money between pay periods, according to Salary Finance.
Overall, American workers are struggling financially.
Asesh Sarkar
CEO of Salary Finance
Even high earners are struggling more than last year, Salary Finance said. Of those earning over six figures, around half are finding it harder to stay afloat and have less savings than in 2021.
A separate report from LendingTree also found that 40% of adults said they were less able to pay their bills compared to a year ago.
“As a whole, working Americans struggle financially, regardless of gender, race, ethnicity, sexual orientation, or income; in fact, half of working Americans who earn more than $100,000 are worse off this year,” said Asesh Sarkar, CEO of Salary Finance. .
“The fed funds rate needs to go up from here”
For its part, the Federal Reserve has indicated that more interest rate hikes are coming until inflation shows clear signs of receding.
The central bank “continues to see a strong green light on future interest rate increases,” said Mark Hamrick, senior economics analyst at Bankrate.com.
“Based on the latest inflation snapshots, they think the target range for the fed funds rate needs to rise from here,” he said. “There is no pivot in sight yet, only a push to higher ground.”