Many Americans are experiencing financial hardship due to the rising expenses of basic needs including housing, transportation, and credit card debt. Personal income fails to keep up with spending for three months.

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With the median mortgage payment exceeding the cost of rent by $1,000 per month and average new car payments and used car loan interest rates reaching new highs, households are feeling the strain of increasing expenses. The milestone of $1 trillion in credit card debt, coupled with record-high interest rates of 25%, underscores the growing financial burdens that ordinary Americans are facing, making it increasingly difficult to afford fundamental needs in today’s economy.





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Personal Income Fails to Keep Up With Spending For Three Months

The BEA’s Personal Income and Outlays report for August shows a surge in inflation and spending but income doesn’t keep up.

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Personal Income and spending chart from the BEA, highlights by Mish

Income, Spending, and Inflation Notes

  • Chained dollars mean inflation adjusted by the PCE price index, not the CPI
  • Real (inflation-adjusted) income fell for the second straight month meaning wages have not kept up with inflation.
  • The PCE price index jumped 0.4 percent in August and is up 3.5 percent from a year ago.
  • Excluding food and energy, the PCE price index rose 0.1 percent and is up 3.9 percent from a year ago.

In nominal terms, consumer spending is on a rampage. For the last three months, income was up 0.1%, 0.0%, and 0.2% while spending rose 0.4%, 0.9%, and 0.4%.

Disposable Personal Income Three Ways Percent Change

Spending Rampage

Real Income and Spending Billions of Chained Dollars


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