Nearly 40% of US adults continually worry that their family’s income won’t cover their expenses, a significant rise from the 28% expressing similar concerns in December 2021. This level of anxiety parallels numbers seen during the Great Recession. To cope, many Americans are supplementing their income with side jobs, reducing driving, and increasingly using credit cards.
Latino and Black Americans report even higher levels of worry, at 52% and 46% respectively. More than half of those earning under $50,000 annually share this financial strain. Despite national statistics indicating cooling inflation, the effects of years of rising prices continue to weigh heavily on households.
Angela Russell, an Ohio resident and program analyst at the CDC, voiced the frustrations common among many: “The grocery store is just outrageous right now. But it’s not just that. Everything has gone up. Clothing.
My insurance.”
Russell recently moved from Cincinnati to a rural area for cheaper rent. Like many, she has also significantly cut back on non-essential spending. Two-thirds of Americans cite expenses and the cost of living as their top economic concern, a decrease from 75% in the summer of 2022 but still significantly higher than the 43% of 2021.
According to Moody’s Analytics, the typical household now spends $925 more per month for the same goods and services as three years ago.
Financial strain affects many Americans
Despite inflation cooling, the slowdown doesn’t translate to falling prices.
Consumer prices rose 3% year-over-year in July, down from a peak of 9% in June 2022. Yet, many Americans do not feel this improvement. “Moderating inflation doesn’t mean prices are coming down, just that they aren’t going up as fast,” said Greg McBride, chief financial analyst at Bankrate.
While paychecks have grown over the past three years, reversing a troubling trend, not all income growth keeps pace with living costs. Median household incomes have increased by $1,110, slightly outpacing the $925 rise in living expenses per month, according to Moody’s Analytics. However, many Americans still struggle.
A poll reveals that 35% of adults have taken on extra work recently to make ends meet, with even higher percentages among Latinos, Black Americans, and those under 45. The poll also found that 69% of Americans have cut back on discretionary spending, 68% have changed their grocery buying habits, and 41% have reduced driving. Russell, constrained by the federal budget, reports a shift in her spending, focusing strictly on essentials.
“Literally everything seems like it’s outpacing what I earn,” she stated. This includes cutting streaming services, reducing movie outings, and purchasing candy from cheaper stores when visiting the theater. The poll was conducted by SSRS from June 3-24 among a random national sample of 2,021 adults.
The margin of sampling error for the full sample is plus or minus 2.7 percentage points.
