NEWS
Almost one in four American households are living paycheck to paycheck
According to research from the Bank of America Institute, in 2025 nearly 24 % of all households in the US are estimated to live paycheck to paycheck. Although there has been a 0.3 percentage point increase in these households year-over-year( YoY), the pace of growth has slowed – down nearly three times from 2024 levels.
The data showed that the number of lower-income households( especially Millennials and Gen X) living paycheck to paycheck continues to rise, while there is almost no increase in the number of higher- and middleincome households. fairly broad definition of necessity spending, covering areas such as housing, gasoline, groceries, utility bills, Internet service provider subscriptions, public transportation and childcare. We then identify the proportion of households in which necessity spending is more than 95 % of their household income, leaving them relatively little or nothing left over for‘ nice-to-have’ discretionary spending or savings. We use this as our central indicator.”
Regionally, there has been a decrease in the share of households living paycheck to paycheck across most of the South and West, but accelerating YoY cost increases could renew financial pressures in these regions.
The report published this month said one way to measure how slowing wages and sticky inflation levels are pressuring consumers’ wallets is to estimate the proportion of households living‘ paycheck to paycheck’, using Bank of America internal consumer deposit and spending data. It said:“ We define living‘ paycheck to paycheck’ using a
Treasury and South African Reserve Bank announce new inflation target for South Africa
The Minister of Finance in South Africa announced in November a new inflation target for South Africa of 3 % with a 1 percentage point tolerance band. This decision follows agreement between the Governor of the South African Reserve
Bank( SARB) and the Minister. The Minister further consulted with the President and Cabinet.
The 1 percentage point band provides flexibility to accommodate any unexpected inflationary shocks. This is in line with South Africa’ s approach to inflation targeting, which has always been a flexible one, looking beyond short-run deviations in inflation. As part of a broader review of macroeconomic policy and in line with international developments, National Treasury and the SARB, both separately and collaboratively through the Macroeconomic Standing Committee, undertook a comprehensive assessment of the appropriate level of the inflation target. This work has now been concluded and recommended a revision to the target to strengthen the framework and enhance price stability by better anchoring inflation expectations and aligning South Africa to international best practice.
The new target immediately replaces the previous target range of between 3 and 6 % and will be implemented over the next two years. Over time, the lower target will decrease inflation expectations and inflation, creating room for lower interest rates. This supports household spending and business investment, boosting economic growth and job creation. x
12 www. intelligentcxo. com