More Americans are feeling financially strained as the prices of basic necessities keep climbing.
At the moment, inflation is showing no signs of slowing down, making it harder for workers to make ends meet.
The Consumer Price Index increased 8.3% from a year ago, higher than the 8.1% estimate, according to the U.S. Bureau of Statistics.
Although it was down slightly from the March peak, inflation is still growing at the fastest annual pace in about four decades.
“Rising prices are putting household budgets in a vise,” said Greg McBride, chief financial analyst at Bankrate.com. “Price increases are widespread, but look at food and shelter — which together account for 40% of the weighting in the CPI and more than that for many households.”
Food prices are up at the fastest pace in more than 41 years and the shelter index, which makes up about one-third of the CPI weighting, was up 5.1% on a yearly basis, its fastest gain since March 1991.
While wage growth is high by historical standards, it isn’t keeping up with the increased cost of living.
When wages rise at a slower pace than inflation, those paychecks won’t go as far at the grocery store and at the gas pump — two areas of the budget that have been particularly squeezed.
As of March, close to two-thirds, or 64%, of the U.S. population was living paycheck to paycheck, just shy of the high of 65% in 2020, according to a LendingClub report.
“The number of people living paycheck to paycheck today is reminiscent of the early days of the pandemic and it has become the dominant lifestyle across income brackets,” said Anuj Nayar, LendingClub’s financial health officer.