Amid the Federal Reserve’s persistent efforts to rein in inflation, a study has revealed that over 60% of Americans are grappling with living paycheck to paycheck, highlighting the enduring impact of high price escalations.
Conducted by LendingClub, the survey unveiled that 61% of adults struggled to make financial ends meet in July—a surge from 59% recorded in the same month of the previous year.
The survey’s findings correlate with recently released federal government data, indicating a 0.2% increase in the Personal Consumption Expenditures index, a pivotal gauge of inflation closely monitored by the Federal Reserve.
Core prices, excluding the more volatile food and energy components, have surged by 4.2% over the past year.
The report further elucidates that Americans are allocating more funds to dine out, attend live events, buy toys, clothing, and prescription drugs. Ordering dishes containing beef and veal has escalated by nearly 11% in July compared to the previous year. Similarly, having a beer at a bar or restaurant became around 4% costlier last month than in the corresponding period last year.
Clothing and footwear prices have risen by over 2.4% year-over-year in July, while children’s clothing experienced a steep 5.4% surge. Medical expenditures have also seen an uptick, with pharmaceutical costs soaring by 3.4% and prescription drug prices rising by 2.8% in July.
Healthcare expenses have amplified as well, with dental visits costing 5.3% more in July compared to the same period the previous year.
As the Federal Reserve contemplates whether to raise interest rates once more during its upcoming meeting, the latest data provide context. Expectations remain that the central bankers will retain the current rate range of 5.25%-5.5%, following a 25 basis point increase in July.
A recent statement from Moody’s Analytics Chief Economist highlighted that Americans are now shelling out an additional $709 monthly for essential goods and services compared to just two years ago.
