Bank of America: Nearly one-third of low-income US households are living paycheck to paycheck

More Americans are surviving paycheck to paycheck, mostly due to the fact that lower-income earners walk astir of their wealth to screen essentials similar housing, gasoline, and groceries, according to caller information from Bank of America.

The study, released Tuesday, recovered that astir 24% of each households are classified arsenic surviving paycheck to paycheck this year, meaning their contiguous net spell toward basal necessities. That stock is somewhat higher than past year, but the complaint has slowed twelvemonth implicit year.

The crushed for the slowdown: Financial strains are becoming progressively concentrated among lower-income earners. "The fig of lower-income households (especially Millennials and Gen X) surviving paycheck to paycheck continues to emergence portion determination is astir nary summation successful the fig of higher- and middle-income households," per the BofA study.

The information shows 29% of lower-income households are surviving paycheck to paycheck, up from 28.6% successful 2024 and 27.1% successful 2023. However, determination has been small to nary summation successful the stock of middle- oregon higher-income households utilizing their contiguous income to screen lone basal expenses. "Why are we lone seeing an summation successful lower-income households? In our view, it’s apt owed to slowing wage maturation for this cohort," the survey authors wrote.

BofA pointed retired that wages for lower-income earners person been lagging comparative to their higher-income counterparts since the opening of 2025.

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By age, BofA information shows that much middle-aged households, specified arsenic millennials and Gen X, person been surviving paycheck to paycheck since past year.

Meanwhile, higher-income millennial households person seen their mean wages turn 5 percent points faster than the wages of lower-income households successful the aforesaid generation.

The information reflects the "K-shaped economy" strategists person pointed out, with higher-income plus holders driving the bulk of user spending and faring amended than lower-income households. "It's precise bifurcated, and I deliberation that's reflective of what we're seeing successful the system and consumers successful general," B. Riley Wealth main marketplace strategist Art Hogan told Yahoo Finance connected Monday.

Consumer Staples (XLP) companies and accelerated nutrient restaurants ranging from Chipotle (CMG) to McDonald's (MCD) person warned of the bifurcated user inclination and pressures facing lower-income earners.

"Think astir the low-income user and ... the pressures that they look ... rents are astatine beauteous precocious levels ... nutrient prices, whether it's successful restaurants oregon market ... childcare is high," McDonald's CEO Chris Kempczinski said past week.