pahrump inflation

The struggle against inflation continues to affect many aspects of our lives. According to a recent report from LendingClub, as of July, a notable 61% of adults are still grappling with living paycheck to paycheck. This figure has only slightly increased from the previous year’s 59%, shedding light on the ongoing financial challenges faced by a significant portion of the population.

Interestingly, recent data suggests a glimmer of relief for consumers who have been grappling with the repercussions of higher prices. When compared to the steep inflation rates experienced a year ago, there seems to be a slight improvement. The months of June and July have witnessed a slowdown in the pace of price hikes. According to the U.S. Bureau of Labor Statistics, core inflation only increased by 0.2% each month during this period.

While this might sound promising, Federal Reserve Chair Jerome Powell remains cautious. He recently emphasized that, despite these positive signs, inflation still looms at concerning levels. Powell even warned about the possibility of further increases in interest rates.

The central bank has already taken action by raising interest rates 11 times. This has led to the Federal Reserve’s key interest rate reaching a range of 5.25% to 5.5%, a level not seen in over 22 years. These measures are intended to combat inflation, but they also impact borrowing costs for consumers.

The impact of inflation is evident in the spending habits of consumers, with four out of five individuals feeling its effects, as per TD Bank’s annual consumer spending index. Chris Fred, TD Bank’s head of credit cards and unsecured lending, stated that consumers are undoubtedly still feeling the pinch from inflation and the rise in interest rates.

Moreover, those on lower incomes are finding it particularly challenging to cope with higher prices, especially for essentials like food. Studies show that this is because these expenses make up a larger portion of their budgets. In July, 78% of consumers earning less than $50,000 annually, and 65% of those making between $50,000 and $100,000, reported living paycheck to paycheck. This is an increase from the previous year, as found by LendingClub. On the other hand, among those earning $100,000 or more, only 44% are living paycheck to paycheck.

The financial stress stemming from inflation is widespread. A separate CNBC Your Money Financial Confidence Survey conducted in March revealed that around 70% of Americans admit to feeling stressed about their finances. This stress is attributed to inflation, rising interest rates, and the lack of savings. Shockingly, only 45% of adults have an emergency fund, and among those who do, approximately 26% have less than $5,000 saved.

The survey also highlighted that 58% of Americans are still caught in the cycle of living paycheck to paycheck, emphasizing the persistence of financial challenges even as some indicators improve.