With painfully high inflation persisting for more than a year, a growing number of Americans are struggling to pay their bills as the price of everyday necessities remains near a four-decade high.
That's according to a new LendingTree study, which found that 32% of Americans have paid a bill late over the past six months, and an overwhelming majority – about 61% – said it's because they did not have enough money to cover the costs.
Another 40% of respondents said they are struggling more to afford their bills than they were just one year ago. Most said they fell behind on a utility bill, credit card payment or cable or internet bill.
"Life is getting more expensive by the day, and it’s shrinking Americans’ already tiny financial margin for error down to zero," said Matt Schulz, LendingTree’s chief credit analyst. "Unless they’ve been able to increase their income, millions of Americans have had to make sacrifices because of inflation to pay the bills."
The financial squeeze stems from the rising cost of a number of basic goods like cars, rent, food, gasoline and health care. As is often the case, the burden is disproportionately borne by low-income Americans, whose already-stretched paychecks are heavily impacted by price fluctuations.
Inflation accelerated again in August, the Labor Department reported last month, with the consumer price index rising by 8.3% on an annual basis and 0.1% from the previous month. While that is down a bit from the 41-year high notched in June, it was much higher than economists expected and underscores that inflationary pressures in the economy remain strong.
Average hourly earnings for all employees actually declined 2.8% in August from the same month a year ago when factoring in the impact of rising consumer prices. By that measure, the typical U.S. worker is actually worse off today than a year ago, even though nominal wages are rising at the fastest pace in years.
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The LendingTree survey comes just a few days before the release of new consumer price index data, which is expected to be another doozy: Economists surveyed by Refinitiv expect that inflation rose 0.3% in September on a monthly basis, faster than the 0.1% pace in August.