The Primerica Household Budget Index reading for September 2023 indicated that the average purchasing power for middle-income households was 99.3%, up from 97.4% in August.
In September 2022, the index was 89.3%. The latest version of the monthly index demonstrates that middle-income families with incomes from $30,000 to $130,000 are enjoying improvements in spending power, the business services firm stated, yet still recovering from the cumulative impact of high inflation.
Primerica set the index baseline in January 2019. Between 2014 and 2020, the HBI analysis showed steady purchasing power gains for middle-income families, with a November 2020 peak of 102.8% that put households in a stronger financial position to pay their monthly bills because wage growth outpaced the cost of everyday goods. Then, increasing inflation caused the index to fall as low as 85.4% in June 2022.
“Wage growth outpaced the increased cost of necessities in September 2023, improving the purchasing power of middle-income households to 99.3%,” said Glenn Williams, Primerica CEO. “Although there were modest improvements in spending power this September, the cumulative effect of high inflation for several months continues to strain middle-income budgets and create stress in families.”
Amy Crews Cutts, Ph.D., CBE, an economic consultant to Primerica, added, “Over the past 18 months, families have had to dig into savings or go into debt to cover the cost of everyday necessity items. The big bump that many middle-income households got from federal pandemic-related Economic Impact Payments is gone and with it, the cushion to weather higher costs for food and utilities heading into winter. We got lucky last year with a mild winter and forecasters are expecting a similar weather pattern for this winter season although, home heating fuel is predicted to be 8% higher over the next few months and could offset this positive budget impact.”
