November 22 2022

Americans Are Struggling Heading Into The Holiday Season

Biden’s economy is failing Americans.

They are heading into the Christmas season facing increasing inflation and with declining savings.

CNBC: 60% of Americans are living paycheck to paycheck heading into the peak shopping season

“Just as the holiday shopping season gets into full swing, families are finding less slack in their budgets than before. 

As of October, 60% of Americans were living paycheck to paycheck, according to a recent LendingClub report. A year ago, the number of adults who felt stretched too thin was closer to 56%.

‘More consumers who have historically managed their budgets comfortably are feeling the financial strain, which will impact their spending behavior as we head into the holiday shopping season,’ said Anuj Nayar, LendingClub’s financial health officer.

Not only are day-to-day expenses higher, but inflation has also caused real wages to decline.

Real average hourly earnings are down 3% from a year earlier, according to the latest reading from the U.S. Bureau of Labor Statistics. 

A separate report by Salary Finance found that two-thirds of working adults said they are worse off financially than they were a year ago. 

Already, credit card balances are surging, up 15% in the most recent quarter, the largest annual jump in more than 20 years.

Roughly half of shoppers said they will buy fewer things due to higher prices, and more than one-third said they will rely on coupons or other money-saving strategies, according to a separate survey by RetailMeNot

More consumers also plan to finance their purchases this year with credit cards and buy now, pay later loans. 

And 25% of shoppers said they would opt for cheaper versions or more practical gifts, such as gas cards, according to another holiday survey by TransUnion.”

PYMNTS: Holiday Spending out of Reach for Millions of Households This Year  

“Visions of sugarplums could be the only thing millions of Americans can count on getting during the 2022 holidays, as new PYMNTS data has uncovered a painful insight into how inflation is eroding personal buying power.

This, as the latest New Reality Check: The Paycheck-To-Paycheck Report: The Holiday Shopping Edition, a PYMNTS and LendingClub collaboration, discovered that 15 million consumers who shopped for gifts in 2021 wouldn’t be doing so this year.

In all, 79% of respondents said they would shop for the 2022 holiday season, marking a nearly nine percentage point drop from the 88% who shopped last year.

‘It’s such a sad statistic that came out of this report,’ Anuj Nayar, financial health officer at LendingClub, told PYMNTS. ‘That means people are not buying gifts, many for the first time.’

With the ranks of paycheck-to-paycheck households rising four percentage points to 60% since October 2021, the new study finds that malaise is spreading to middle-income and high-income earners, with 65% of those earning $50,000 and $100,000 and 43% of those earning over $100,000 now living paycheck to paycheck, a rise of 58% and 38%, respectively.

Nayar found it particularly concerning that more Americans plan to make holiday purchases with credit cards and alternatives like buy now pay later (BNPL) when the open-to-buy on the average credit card is nearly exhausted, and POS credit carries issues of its own.

Remarking on report findings that 40% of Americans plan to use some form of financing to manage their holiday spending, Nayar said: ‘If you’re using credit cards for convenience, knock yourself out. But most people are not.’

‘Credit card debt is at an all-time high. Credit card rates are reaching all-time highs,’ he added. ‘What the report showed was that, specifically for those who are struggling to pay their bills, they are almost saturating their credit card balances. They have on average, I think, a $4,500 balance, and they are at 97% of that.’”

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