The Blubber

50% of American earning over $100,000 a year live paycheck to paycheck, per CNBC.


The ongoing challenges of high inflation and elevated interest rates continue to impact American households significantly.

According to a recent report from LendingClub, as of September, 62% of adults disclosed that they are living paycheck to paycheck. This figure remains unchanged from the previous year, indicating that a majority of U.S. consumers continue to experience financial strain.

Despite some indications of inflation easing, recent economic data provides a mixed assessment. The core personal consumption expenditures price index, a key measure used by the Federal Reserve, rose by 0.3% in September. Additionally, the consumer price index, another closely monitored gauge of inflation, increased slightly more than expected, driven by higher prices for essential items like food, gas, and shelter. Consequently, real average hourly earnings declined.

Economists and central bankers generally concur that interest rates are likely to remain elevated for an extended period.

Brett House, an economics professor at Columbia Business School, noted, "Many households are seeing their finances stretched thinly by the combination of high prices for goods and services as well as high interest rates. Many are having to make tough choices to defer discretionary spending to stay on top of their loan payments and the costs of necessities." The resumption of student loan payments further exacerbates financial stress for many.

A separate CNBC Your Money Financial Confidence Survey conducted in August revealed that 74% of Americans are stressed about finances. Factors such as inflation, rising interest rates, and insufficient savings contribute to this widespread financial anxiety. The survey also found that 61% of Americans are living paycheck to paycheck, up from 58% in March.

Numerous households have tapped into their cash reserves over the past months, according to reports from LendingClub and others. A Bankrate survey indicated that 49% of adults have less or no savings compared to a year ago.

On a positive note, those with remaining balances, primarily among high-income households, are experiencing "better interest payments than they’ve received at any time in the recent past," according to House. High-yield savings accounts, certificates of deposit, and money market accounts are currently offering interest rates exceeding 5%, the most substantial earnings for savers in nearly two decades, as reported by Bankrate.