Special Report: Middle-Income Families Resilient Amid High Inflation, Economic Uncertainty
February 03 2023 - 12:00AM
Business Wire
Cost of food, gas and utilities greatly impact
household budgets
Primerica, Inc. (NYSE: PRI), a leading provider of financial
services in the United States and Canada, released a special report
titled, “The Financial Condition of Middle-Income American Families
Heading Into 2023.”
Researched and written by Amy Crews Cutts, Ph.D., CBE®, economic
consultant to Primerica, the report combines data from the monthly
Consumer Price Index (CPI), the Federal Reserve Bank of Atlanta,
and Primerica’s Financial Security Monitor — a national survey that
measures changes in the sentiments of middle-income families in the
U.S. about their finances — to present a clear picture of the
pressures these households face.
As many economists continue to predict a recession this year,
middle-income families are already taking an economic hit that is
threatening their long-term financial security. A focused analysis
of the CPI for just the cost of food, gas and utilities —
necessities that greatly impact middle-income households’ budgets —
shows prices on those items rose significantly higher than
benchmark inflation in 2022.
“High inflation stings for everyone, but it’s especially painful
for middle-income American families,” said Dr. Cutts. “With prices
increasing at the fastest rate in a generation, the middle-market
is now spending their savings to make ends meet. Even so, most
middle-income households are optimistic about their future and show
a remarkable resilience in the face of economic headwinds.”
Primerica’s quarterly survey also highlights a disconnect
between what middle-income families say they will do and what they
actually do. Respondents frequently overestimated their ability to
save and limit spending, as well as their ability to pay all their
bills. Still, the Financial Security Monitor has consistently found
that most middle-income households rate their financial situation
positively, and they remain optimistic about the year ahead with
many adjusting their spending or savings to cope.
“Our report illustrates not only the economic burden facing
middle-income Americans but also their resilience in these tough
financial times,” said Peter W. Schneider, President of Primerica.
“Families are well aware of the potential economic risks in the
year ahead and are proactively taking steps to reduce the impact on
their financial future.”
Key Findings
- Savings take a hit. A large majority (82%) of
respondents to Primerica’s survey either curtailed or stopped
saving for the future or tapped into existing savings to make ends
meet as their income fell behind the cost of living.
- Inflation’s disproportionate impact. In 2022, food, gas
and utilities prices remained elevated, peaking in the second
quarter at 18.2% higher than the previous year. The full CPI peaked
at 8.6% in the second quarter.
- Increase in missed payments. Primerica’s survey found 5%
of respondents thought they would likely miss a debt payment in the
fourth quarter, yet a significantly higher percentage of 18%
reported being delinquent when the quarter ended.
- Spending higher than anticipated. Only 15% of survey
respondents in Primerica’s third quarter survey planned to spend
more money overall in the fourth quarter. However, more than double
that share — 33% — ended up spending more than planned.
- Most rank personal finances positively. When asked about
the condition of their personal finances in Primerica’s survey, 53%
of respondents in the fourth quarter of 2022 reported they were in
good or excellent shape; however, this is down from 60% a year
earlier.
About Primerica’s Financial Security Monitor
The Financial Security Monitor is a quarterly national survey to
monitor the financial health of those with annual household incomes
of $30,000-$100,000. Using Dynamic Online Sampling, Change Research
polls more than 800 adults nationwide with incomes between $30,000
and $100,000. Post-stratification weights were made on gender, age,
race, education, and Census region to reflect the population of
these adults based on the five-year averages in the 2019 American
Community Survey, published by the U.S. Census.
About Primerica, Inc.
Primerica is a leading provider of financial services to
middle-income households in the United States and Canada. Licensed
financial representatives educate Primerica clients about how to
prepare for a more secure financial future by assessing their needs
and providing appropriate products like term life insurance, mutual
funds, annuities, and other financial products. Primerica insured
over 5.7 million lives and had over 2.7 million client investment
accounts as of December 31, 2021. Primerica was the #2 issuer of
Term Life insurance coverage in the United States and Canada in
2021 through its insurance company subsidiaries. Primerica stock is
included in the S&P MidCap 400 and the Russell 1000 stock
indices and is traded on The New York Stock Exchange under the
symbol “PRI”.
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version on businesswire.com: https://www.businesswire.com/news/home/20230202005903/en/
Media Relations: Gana Ahn, 678-431-9266
gana.ahn@primerica.com
Investor Relations: Nicole Russell, 470-564-6663
nicole.russell@primerica.com
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