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US Inflation: Alarming amount of Americans say they’re living pay check to pay check on $340,000 salaries

An alarming amount of Americans say they’re living pay check to pay check despite being inside the country’s highest income bracket.

An alarming amount of Americans say they’re living pay check to pay check despite raking in salaries of $300,000 and above.

A new study published by financial publication Pymnts.com and LendingClub Corp revealed more than a third of Americans earning at least $250,000 (A$340,000) are living month to month as inflation begins to take hold.

In April, the Consumer Price Index recorded a rise of 7.9 per cent — the highest amount in 40 years.

Roughly 36 per cent of households taking in nearly four times the median US salary said they put nearly all of their income towards household expenses. Millennials spanning from their 20s to early 40s were overwhelmingly represented in the data, with a whopping 55.4 per cent of the highest pay bracket admitting they had next to nothing left at the end of each month.

According to US Census Bureau data, the $250,000-plus income bracket represents the top 5 per cent of earners in the US.

While the study made clear living month to month did not indicate financial hardship, the figures are alarming to those truly forced to squeeze every penny on lower wages as the cost of living continues its rapid rise.

According to the survey, roughly one in ten of top earners said they were struggling covering all their household expenses in April, which have surged during the pandemic and beyond.

The study also revealed more than one fifth of high income earners have revolving credit card debt.

A separate study conducted by the Federal Reserve in May stated 78 per cent of Americans were “doing okay financially”. However, one in nine respondents said that they wouldn’t be able to cover a $400 emergency expense by any means, including credit cards, borrowing from family or friends or by offloading an asset.

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Sky News Business Editor Ross Greenwood said the 8.3 per cent US inflation rate may provide a “glimpse” of what it might be like in Australia in three or four months’ time.

“The things that were going up fastest in America are the things that are rising in Australia,” he told Sky News Australia.

“The response on the markets has been immediate; our market today has already lost another 1.2 per cent, about 82 points. The Australian dollar has fallen; it’s currently sitting at around 69.1 US cents.”

US President Joe Biden blamed Russia’s invasion of Ukraine for pushing inflation even higher.

“A large contributor to inflation this month was an increase in gas and energy prices as markets reacted to [Russian President Vladimir] Putin’s aggressive actions,” the US President wrote on Twitter.

“I know that higher prices impact a family’s budget, which is why I am fighting to bring down the everyday prices that are squeezing Americans.”

In a statement, the US President warned of the impacts of “Putin’s price hike” and acknowledged there would be “costs at home.”

“But Americans can know this: the costs we are imposing on Putin and his cronies are far more devastating than the costs we are facing,” Mr Biden said.

According to the Bureau of Labor Statistics, the price of petrol rose by 38 per cent over the previous 12 months.

Most analysts predict inflation will worsen after Mr Biden announced a ban on imports of Russian oil, natural gas, and coal Tuesday in response to Russia’s invasion of Ukraine.

“The commodity price shock from the war in Ukraine – if it persists — is likely to push price metrics even higher,” Ms Bostjancic said.

In November last year, US inflation jumped 6.2 per cent. At the time the White House insisted inflation would be “transitory”. Press secretary Jen Psaki today said analysts expected inflation would slow at the end of the year.

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