{"id":260665,"date":"2025-11-13T15:28:19","date_gmt":"2025-11-13T15:28:19","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/260665\/"},"modified":"2025-11-13T15:28:19","modified_gmt":"2025-11-13T15:28:19","slug":"things-are-pretty-crappy-1-in-4-us-households-are-living-paycheck-to-paycheck","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/260665\/","title":{"rendered":"\u2018Things are pretty crappy.\u2019 1 in 4 US households are living paycheck to paycheck"},"content":{"rendered":"

New York
\n \u00a0\u2014\u00a0<\/p>\n

\n Austin H. can\u2019t wait to buy a house and start a family. But right now, the 34-year-old is barely getting by.\n <\/p>\n

\n Austin is living paycheck to paycheck and saving almost no money, one of the millions of Americans struggling to make ends meet in an increasingly unaffordable economy.\n <\/p>\n

\n Worse, the family-owned construction business he works at is shutting down.\n <\/p>\n

\n \u201cI am going to be unemployed in the next month or two \u2013 with no safety net,\u201d said Austin, who declined to share his last name.\n <\/p>\n

\n An estimated 24% of US households are living paycheck to paycheck so far in 2025, according to a Bank of America Institute analysis released this week. The bank\u2019s researchers combed through internal data on its tens of millions of consumers and tracked how much income customers spent on necessities like housing, gasoline, groceries, child care and utilities.\n <\/p>\n

\n They found that 24% of households spend over 95% of their income on those necessities, leaving little to nothing left over for the \u201cnice-to-have\u201d things like going out to dinner or taking a vacation, let alone saving.\n <\/p>\n

\n Austin, who has a master\u2019s degree in fine arts, said he\u2019s applied to roughly 1,000 jobs over the past year \u2013 everything from teaching to construction \u2013 with no luck.\n <\/p>\n

\n \u201cTo be 34 and living paycheck to paycheck with no savings, things are pretty crappy right now,\u201d he said.\n <\/p>\n

\n Austin is supporting his partner, a veterinary student, and worries about how the two of them will pay off his student debt on top of all their other expenses.\n <\/p>\n

\n \u201cWe want to own a house and start a family, but I don\u2019t know how we will ever get our feet under ourselves,\u201d he said.\n <\/p>\n

\n The Bank of America report is evidence of the K-shaped economy, where affluent Americans are faring far better than those at the bottom.\n <\/p>\n

\n Many are struggling to get by, even as President Donald Trump dismisses affordability concerns<\/a> as a \u201ccon job\u201d conjured up by Democrats based on \u201cfake\u201d polls.\n <\/p>\n

\n But the rate of increase in households living paycheck to paycheck has slowed significantly this year, and while there is little change this year for middle- and high-income households, the share of lower-income households living paycheck to paycheck has jumped from 27% in 2023 to 29%, according to Bank of America.\n <\/p>\n

\n \u201cHigher income and lower income households are living in two different worlds,\u201d Joe Wadford, economist at the Bank of America Institute, told CNN.\n <\/p>\n

\"A<\/p>\n

\n The problem is that paychecks among lower-income households are often not keeping up with prices \u2013 especially now that inflation has reaccelerated.<\/a>\n <\/p>\n

\n After-tax wages increased about 2% in October year over year among middle-income consumers, Bank of America found. That\u2019s below the 3% inflation rate as of September.\n <\/p>\n

\n Wage growth for lower-income Americans is falling even further behind. Their after-tax wages increased just 1% year-over-year.\n <\/p>\n

\n By contrast, high-income wages jumped 4%, safely outpacing the increase in the cost of living.\n <\/p>\n

\n Wadford said the wage growth gap between high- and low-income Americans hasn\u2019t been this high since 2016.\n <\/p>\n

\n For Millennials like Austin, that gap is even bigger.\n <\/p>\n

\n Wages have inched up just 1% for low-income Millennials, compared with 6% for high-income.\n <\/p>\n

\n \u201cWe work full-time and have degrees. And we\u2019re getting nowhere,\u201d Austin said.\n <\/p>\n

\n Gregory Daco, chief economist at EY-Parthenon, said the large number of households living paycheck to paycheck underscores the \u201cdeepening affordability crisis\u201d caused by five years of price hikes that have outpaced income gains.\n <\/p>\n

\n For the broader economy, the risk is that many families struggling to get by and worried about their jobs opt to spend much more cautiously.\n <\/p>\n

\n \u201cThis could weaken the foundation of a consumer-driven economy,\u201d Daco said.\n <\/p>\n

\n That\u2019s especially true if layoffs gather steam in what had been a no-fire, no-hire job market.\n <\/p>\n

\n Goldman Sachs economists warned in a recent research report of a growing \u201crisk of labor market deterioration.\u201d The Wall Street bank estimates there is a 20% to 25% chance that the US unemployment rate jumps by at least 0.5 percentage points in the next six months. That\u2019s up from just a 10% chance as of six months ago.\n <\/p>\n

\n Some Americans are falling behind on their bills \u2013 especially those with low credit scores.\n <\/p>\n

\n The percentage of subprime borrowers who are at least 60 days late on their car loans<\/a> climbed to 6.65% in October, according to Fitch Ratings.\n <\/p>\n

\n That is the highest since Fitch tracking began in the early 1990s, surpassing the prior peak set in January and well above levels during the Great Financial Crisis.\n <\/p>\n

\n This trend is a clear sign of financial distress, especially since car loans are historically the last payment Americans are willing to miss.\n <\/p>\n

\n Bank of America has found that the number of households making just the minimum payment on their credit card is also rising, though so is the share of credit card users paying off their entire balance each month.\n <\/p>\n

\n \u201cThere is a mixed bag. There are some signs of consumer health, and yet, within the minority of people experiencing financial stress, pressure is mounting,\u201d said Wadford, the Bank of America economist.\n <\/p>\n

\n Vanessa Jones, a 65-year-old grandmother living in Davenport, Iowa, took on a second nursing job two years ago because she couldn\u2019t make ends meet.\n <\/p>\n

\n \u201cThe cost of living is way too high. My savings have been depleted. I haven\u2019t tapped into my retirement, but that looks like the next step,\u201d she said.\n <\/p>\n

\n Jones, the primary caregiver for her two grandchildren, was recently diagnosed with cancer and wound up with \u201castronomical\u201d medical bills. Facing $85,000 in medical debt, she filed for bankruptcy.\n <\/p>\n

\n Jones pushed back on politicians arguing there is no affordability crisis.\n <\/p>\n

\n \u201cThe people claiming prices are lower are not actually buying their own groceries or trying to find the cheapest place to get their car fixed,\u201d she said. \u201cThey need to walk in our shoes.\u201d\n <\/p>\n","protected":false},"excerpt":{"rendered":"New York \u00a0\u2014\u00a0 Austin H. can\u2019t wait to buy a house and start a family. But right now,…\n","protected":false},"author":2,"featured_media":260666,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1294,56,54,55],"class_list":{"0":"post-260665","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-uk","11":"tag-united-kingdom","12":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/260665","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=260665"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/260665\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/260666"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=260665"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=260665"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=260665"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}