BIDENOMICS: Majority of U.S. Adults Living Paycheck to Paycheck: Report; 60% of Americans Are Living Paycheck to Paycheck

Report: Majority of U.S. Adults Living Paycheck to Paycheck

The majority of U.S. adults are living paycheck to paycheck heading into this holiday season, a report shows.

LendingClub’s latest report shows that as of October, 60 percent of adults said they are living paycheck to paycheck. Around 40 percent of consumers consider themselves to be worse off now than in 2022.

Even higher earners are struggling to get by, with 42 percent of those making six figures also living check-to-check under President Joe Biden.

According to a separate CNBC survey, the number of adults struggling to save between checks is up from 58 percent in March.

“While consumers have found a way to manage through inflation, it’s concerning that many plan to tap into savings, and even exceed their budgets, to finance their holiday purchases, which may leave them vulnerable to an unexpected emergency,” said Alia Dudum, LendingClub’s money expert.

The LendingClub report also revealed 43 percent of consumers who are living paycheck to paycheck and “struggling to pay bills” are planning to use credit for holiday shopping.

Consumers are steadily adopting the “mentality of hyper-consumption,” said Jacqueline Howard, head of money wellness at Ally financial services.

“Hyper-consumption comes from not being mindful,” she added. “Consider what makes the most sense in terms of your well-being.” —>READ MORE HERE

Lending Club: 60% of Americans Are Living Paycheck to Paycheck:

The Paycheck-to-Paycheck Landscape

As of October 2023, 60% of consumers lived paycheck to paycheck, unchanged from a year prior. Among income brackets, 76% of consumers earning less than $50,000 annually lived paycheck to paycheck as of October 2023, as did 65% of those earning between $50,000 and $100,000 and 42% of consumers earning more than $100,000.

While the share of consumers living paycheck to paycheck has remained relatively stable in 2023, gloomy perceptions about the economy continue to impact consumer sentiment, with many believing they are worse off now than they were in 2022. Overall, 38% of consumers consider themselves in poorer financial health relative to 2022, and 62% are very or extremely concerned about the economic outlook. Furthermore, a solid majority of Americans (58%) are still seeing inflation exceed growth in their paychecks.

Consumer Spend During the 2023 Holiday Season

Even though consumers believe their financial health is worse than a year ago, 77% expect to shop during the 2023 holiday season, only slightly less than the 78% seen a year ago. As was the case in 2022, bridge millennials and millennials are the most likely to plan to shop this year, at 81% and 80% respectively, and more likely than the average shopper to say they will spend more this year than last year, at 27% and 31% respectively. In fact, 1 in 5 shoppers expect their holiday spending will increase, primarily because of higher prices. That said, many consumers expect to spend less overall during the holiday season for a variety of reasons, citing decreased spending capacity (60%) and more conservative spending (23%) as the chief deterrents.

Consumers Will Use Various Financing Options —>READ MORE HERE

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