Rising costs have cut into the standard of living of most Americans.
As inflationary pressures continue, two-thirds of working adults said they are worse off financially than they were a year ago, according to a recent report by Salary Finance.
To make ends meet, many dip into their cash reserves or go into debt.
Nearly three-quarters, or 72%, of consumers have less in savings than last year, up from 55% who said the same in February, the report found. And 29% said they have completely wiped out 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 price change for consumer goods and services, rose more than expected again in September and was 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 3% lower than a year ago, leaving more Americans living paycheck to paycheck.
Now, 32% of adults said they regularly run out of money between pay periods, according to Salary Finance.
Even high earners are struggling more than last year, Salary Finance said. Of those earning more than six figures, about half are finding it harder to stay afloat and have less in savings than they did in 2021.
A separate report from LendingTree also found that 40% of adults said they can afford less to pay their bills compared to a year ago.
“Across the board, American workers are struggling financially, regardless of gender, race, ethnicity, sexual orientation or earnings; in fact, half of American workers earning over $100,000 are disadvantaged this year,” said Asesh Sarkar, CEO of Salary Finance.
‘Federal funds rate must go higher from here’
The Federal Reserve, for its part, has indicated that there will be more rate hikes until inflation shows clear signs of a rebound.
The Fed “continues to see a clear green light on future rate hikes,” said Mark Hamrick, senior economic analyst at Bankrate.com.
“Based on recent snapshots of inflation, they believe the target range for the federal funds rate needs to go higher from here,” he said. “There is no pivot in sight yet, only a push to higher ground.”
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