Even on $100K plus, more Americans are living paycheck to paycheck

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The share of Americans who say they live paycheck-to-paycheck climbed last year, and most of the new arrivals in that category were among the country’s higher earners, a new study shows.

Some 64% of US consumers — equivalent to 166 million people — were living paycheck-to-paycheck at the end of 2022, according to the survey by industry publication Pymnts.com and LendingClub Corp.

That’s an increase of 3 percentage points from a year earlier, or 9.3 million Americans. And out of that group, some 8 million were people earning more than $100,000 a year. More than half of that income cohort said they lived paycheck-to-paycheck in December, up 9 percentage points from a year earlier.

The numbers likely reflect growing strain on household budgets after the cost of living surged, wages often failed to keep up, and pandemic savings got drawn down. ‘Prospects are cloudy’ This year may bring further pressure, with less than half of the survey respondents saying they expect their incomes to keep pace with inflation.

“Prospects for consumer spending are cloudy,” said Lydia Boussour, senior economist at EY Parthenon. “Elevated prices, eroded personal savings and increased reliance on credit point to weak consumer spending this winter,” she said. “These dynamics will be exacerbated by negative wealth effects from lower stock prices and declining home values.”