Majority of Americans Say They Are Suffering Financially This Year Due to Inflation

A shopper is seen past a sign displaying the price per pound of russet potatoes at a supermarket in Montebello, Calif., on Aug. 23, 2022. Frederic J. Brown/AFP via Getty Images

Record-high inflation is beginning to affect the majority of ordinary Americans’ standard of living this year.

More than two-thirds of workers, or 72 percent, admit that they are worse off financially than than in 2021, primarily due to higher prices, according to a report by Salary Finance.

This is an increase from the 55 percent making the same claim in February.

The rising cost of living is making more American households struggle to make ends meet and forcing millions to live paycheck to paycheck. Many families are even dipping into their cash reserves and are increasingly fearing going into debt, said the report.

“Across the board, American workers are struggling financially, regardless of gender, race, ethnicity, sexual orientation, or earnings; in fact, half of American workers making over $100,000 are worse off this year,” said Asesh Sarkar, CEO of Salary Finance.

Nearly a third of workers, or 32 percent, including those earning more than $100,000, told the survey that they were already in debt before their next paycheck.

Roughly half of those making than six figures were having a harder time paying their bills and had less in savings than they did last year. At least 29 percent of respondents said that their savings had been wiped out entirely.

The report is based on a survey of 500 adults in August.

US Core Consumer Prices Rise Faster Than Average Wages

The Department of Labor’s Consumer Price Index, which measures consumer inflation, rose higher than expected, and has been leveling at its highest rate in 40 years.

Core consumer prices for everyday goods, including energy, groceries, and housing, rose 0.4 percent in September from the previous month, while jumping 6.6 percent from the same time last year.

Overall inflation rates climbed 8.2 percent on an annual basis from August.

Average hourly earnings for all employees fell 3 percent from the same month a year ago, after factoring in the impact of rising consumer prices.

The value of worker’s hourly wages dropped 0.1 percent last month, when accounting for inflation. Average wages rose only 6.3 percent on an annual basis in September, according to the Federal Reserve Bank of Atlanta, which is far lower than both headline and core inflation.

Similarly, a LendingTree report found that 40 percent of Americans said they were less able to pay their bills compared with a year ago.

More than half of Americans in the report say they over-drafted their accounts to pay off bills, with 61 percent admitting it was because they lacked enough money to cover expenditures.

The Federal Reserve is indicating that there will be another boost to interest rates in November, with more hikes likely through next year, at least until inflation, aspirationally for now, is under control.

Reuters contributed to this report.