According to The Daily Wire, recent data released by Lending Club indicates that in June 2022, 61% of all Americans were living paycheck-to-paycheck, including 36% of those earning more than $200,000 per year.
“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.
“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 will soon struggle to pay 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.”
The press release also noted that 33.5 million American consumers spent more than they earned in the past six months.
CNBC pointed out that while paychecks have risen by 5.1%, they have not been able to keep up with inflation, which has risen to 9.1%.
Senate Democrats recently revealed the Inflation Reduction Act of 2022 in an attempt to address the problem.
However, a study from Penn Wharton found that the bill could lead to an increase inflation over the next two years.
“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.
The study makes it clear that inflation could rise as much as 0.05% before a slight drop of 0.25% “by the late 2020s,” making the bill superfluous.
Another study showed the Act would also hike taxes on the middle-class and low-income Americans.