61% Of Americans Living Paycheck-To-Paycheck

61% Of Americans Living Paycheck-To-Paycheck

Bidenflation is hitting Americans across the board, according to a new study.

On Monday, CNBC reported that recent data from LendingClub indicates that in June 2022, 61% of all Americans are living paycheck-to-paycheck — including 36% of those earning more than $200,000. That figure is up 55% from the year before for all Americans.

“What a difference a year makes. Last summer we were all worried about how quickly the economy would recover,” Anuj Nayar, LendingClub’s Financial Health Officer, said in a press release issued Monday. “Now, as inflation continues its upwards swing, consumers are finding it more difficult to manage spending and are eating into their savings as financial pressures mount.”

Nayar predicted that Americans would soon have difficulties handling unexpected costs.

“That said, consumers are not yet slowing down their spending habits, despite the rise in the cost of living,” she added. “Not only is it going to be difficult for them to handle future emergency expenses, but even foreseen payments like education, student loans, or housing expenses may be harder to balance for the everyday American consumer.”

LendingClub’s press release also noted, “An estimated 33.5 million — or 13% — of U.S. consumers spent more than they earned in the past six months.”

As pointed out by CNBC, while paychecks might have risen 5.1%, skyrocketing inflation has outpaced average salary increases. In June, American inflation rose 9.1%, negating most economic gains.

To help address the problem, Senate Democrats recently unveiled the “Inflation Reduction Act of 2022.” However, a Penn Wharton study released Friday shows that the bill could lead to a slight increase in inflation over the next two years, doing the exact opposite of what its name suggests.

Penn Wharton analyzed the massive spending package that gained the support of moderate Sen. Joe Manchin (D-WV) last week, surprising many political observers.

“The Act would very slightly increase inflation until 2024 and decrease inflation thereafter. These point estimates are statistically indistinguishable from zero, thereby indicating low confidence that the legislation will have any impact on inflation,” the Penn Wharton Budget Model found.

According to the study, inflation could rise by 0.05% over the next two years before a marginal drop of 0.25% “by the late 2020s,” rendering the spending package ineffective at accomplishing its purpose.

The Penn Wharton findings were released the same day that new data from the Bureau of Economic Analysis (BEA) showed that the personal consumption expenditures (PCE) index, a key measure of inflation, increased 6.8% in June. That’s the highest yearly increase since January 1982, marking troubling news for Americans as the economy entered a recession on Thursday.

To make matters worse for most Americans, Republicans on the Senate Finance Committee released data Saturday from the nonpartisan Joint Committee on Taxation (JCT) that indicated the Inflation Reduction Act would increase taxes in the calendar year 2023 for everyone except those making between $10,000 and $30,000 per year.

Zach Jewell and Ryan Saavedra contributed to this article. 

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