Primerica Household Budget Index™: Middle-Income Households Saw Improving Financial Conditions in October
30 Novembro 2023 - 2:00AM
Business Wire
Increased earnings, slowing inflation drove an
increase in purchasing power
Primerica, Inc. (NYSE: PRI), a leading provider of financial
services and products in the United States and Canada, announced
today the release of the Primerica Household Budget Index™ (HBI™),
a monthly index illustrating the purchasing power of middle-income
households with incomes between $30,000 and $130,000. In October
2023, the average purchasing power for middle-income households was
99.1%, up from 98.1% in September. A year ago, the index stood at
92.4%.
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Primerica Household Budget Index™ (HBI™)
– In October 2023, the average purchasing power for middle-income
households was 99.1%, up from 98.1% in September. A year ago, the
index stood at 92.4%. Increased earnings and slowing inflation
drove an increase in middle-income households’ purchasing power.
(Graphic: Business Wire)
“Price levels remain higher for important necessity items,
although middle-income families are feeling some relief from the
falling price of gasoline and increasing household incomes,” said
Glenn J. Williams, CEO of Primerica. “Even with this, going into
the holiday season, we expect there will be increased hesitation
around spending as a result of the cumulative impact of inflation
on monthly budgets.”
“Middle-income households are gaining traction financially, but
still have a ways to go before they will feel like they are getting
ahead,” said Amy Crews Cutts, Ph.D., CBE® an economic consultant to
Primerica. “We are seeing income gains, yet it can be hard for
middle-income households to get used to the higher prices for basic
necessities and this has the potential to impact future spending
patterns for these items.”
HBI HISTORICAL BACKGROUND
The index baseline is set at January 2019 and can be thought of
as when middle-income households set a budget based on their earned
income at that time. Between 2014 and 2020, the HBI™ results
recorded steady gains in purchasing power for middle-income
families, with a peak of 105.1% in November 2020. This means that
relative to January 2019, households were in a stronger financial
position to pay their monthly bills because wage growth outpaced
the cost of everyday goods. Increasing inflation then caused the
index to plummet. In June 2022, it reached a post-pandemic low of
86.7%.
Since the baseline of January 2019, the average middle-income
household has cumulatively spent around $1,095 more than budget on
basic necessities. In line with this, if the pandemic and ensuing
inflation would not have been a factor, the HBI™ today would be
closer to 110%.
For more information on the Primerica Household Budget Index,
visit www.householdbudgetindex.com.
About the Primerica Household Budget Index™ (HBI™)
The Primerica Household Budget Index™ (HBI™) is constructed
monthly on behalf of Primerica by its chief economic consultant Amy
Crews Cutts, PhD, CBE®. The index measures the purchasing power of
middle-income families with household incomes from $30,000 to
$130,000 and is developed using data from the U.S. Bureau of Labor
Statistics, the US Bureau of the Census, and the Federal Reserve
Bank of Kansas City. The index looks at the cost of necessities
including food, gas, utilities, and health care and earned income
to track differences in inflation and wage growth.
The HBI™ is presented as a percentage. If the index above 100%,
the purchasing power of middle-income families is stronger than in
the baseline period and they may have extra money left over at the
end of the month that can be applied to things like entertainment,
extra savings, or debt reduction. If it is under 100%, households
may have to reduce overall spending to levels below budget, reduce
their savings or increase debt to cover expenses. The HBI™ uses
January 2019 as its baseline. This point in time reflects a recent
“normal” economic time prior to the COVID-19 pandemic.
Periodically, prior HBI™ values may be revised due to revisions
in the CPI series and Consumer Expenditure Survey releases by the
U.S. Bureau of Labor Statistics (BLS). Beginning with the October
2023 release of the HBI™ data, health insurance costs will no
longer be included in the calculation of the HBI™ data as part of
the healthcare component because of some newly acknowledged
methodology that has been used by the BLS to calculate the health
insurance CPI. The health insurance CPI, as calculated by BLS, does
not measure consumer costs of health insurance such as the cost of
premiums paid or a combination of premiums and deductibles, but
rather premium values retained by health insurers we do not believe
it accurately reflects consumer experiences. The healthcare
component will continue to include medical services, prescription
drugs and equipment. Prior published values have been adjusted to
reflect this change.
About Primerica, Inc.
Primerica, Inc., is a leading provider of financial services and
products to middle-income households in North America. Independent
licensed representatives educate Primerica clients about how to
better prepare for a more secure financial future by assessing
their needs and providing appropriate solutions through term life
insurance, which we underwrite, and mutual funds, annuities and
other financial products, which we distribute primarily on behalf
of third parties. We insured over 5.7 million lives and had over
2.8 million client investment accounts on December 31, 2022.
Primerica, through its insurance company subsidiaries, was the #3
issuer of Term Life insurance coverage in the United States and
Canada in 2022. 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/20231129111859/en/
Public 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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