Prices soar on consumer goods and increased wages can’t catch up thanks to inflation caused by the Biden Administration’s horrible economic policies Americans now have to live paycheck to paycheck.
CNBC reports that Paychecks may have risen 5.1%, but skyrocketing inflation has outpaced average salary increases.
The annual inflation rate for the United States is 9.1% for the past 12-month period ending in June. This is according to data published on July 13 by the U.S. Department of Labor. This was the largest annual increase since November 1981. The consumer price index previously surged in May by 8.6%.
PYMNTS and LendingClub recently released new data that indicates nearly two-thirds of Americans, around 157 million people, are living paycheck to paycheck. In April alone, there was a nearly 9% increase, up to 61% for 52%, in those adopting this financial lifestyle.
Anuj Nayar, LendingClub’s Financial Health Officer, said in a press release:
“What a difference a year makes. Last summer we were all worried about how quickly the economy would recover. 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.”
According to Nayar Americans would soon have difficulties handling 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.”
LendingClub’s press release also noted, “An estimated 33.5 million — or 13% — of U.S. consumers spent more than they earned in the past six months.”
The Daily Caller reports:
To help address the problem, Senate Democrats recently unveiled the “Inflation Reduction Act of 2022.” However, a Penn Wharton study released Friday shows that the bill could lead to a slight increase in inflation over the next two years, doing the exact opposite of what its name suggests.
Penn Wharton analyzed the massive spending package that gained the support of moderate Sen. Joe Manchin (D-WV) last week, surprising many political observers.
“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.
According to the study, inflation could rise by 0.05% over the next two years before a marginal drop of 0.25% “by the late 2020s,” rendering the spending package ineffective at accomplishing its purpose.
The Penn Wharton findings were released the same day that new data from the Bureau of Economic Analysis (BEA) showed that the personal consumption expenditures (PCE) index, a key measure of inflation, increased 6.8% in June. That’s the highest yearly increase since January 1982, marking troubling news for Americans as the economy entered a recession on Thursday.
To make matters worse for most Americans, Republicans on the Senate Finance Committee released data Saturday from the nonpartisan Joint Committee on Taxation (JCT) that indicated the Inflation Reduction Act would increase taxes in the calendar year 2023 for everyone except those making between $10,000 and $30,000 per year.
Sources: DailyCaller, CNBC, LendingClub
