Rising Gas Prices Continue to Limit Purchasing Power of Middle-Income Households
28 Setembro 2023 - 11:00AM
Business Wire
Primerica’s Household Budget Index sees slight
decline
Primerica, Inc. (NYSE: PRI), a leading provider of financial
services 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 U.S. middle-income
households with incomes between $30,000 and $130,000. In August
2023, the average purchasing power for U.S. middle-income
households was 97.4%, down from 97.5% in July 2023. A year ago, in
August 2022, the index stood at 88.6%. The slight decrease this
month shows that middle-income budgets are still stressed and
saving for the future, while eliminating debt remains a
challenge.
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Primerica Household Budget Index™ - In
August 2023, the average purchasing power for U.S. middle-income
households was 97.4%, down from 97.5% in July 2023. A year ago, in
August 2022, the index stood at 88.6%. The slight decrease this
month shows that middle-income budgets are still stressed and
saving for the future, while eliminating debt remains a challenge.
(Graphic: Business Wire)
“The fragile financial condition of middle-income families
experienced continued stress in August,” said Glenn J. Williams,
CEO of Primerica. “Both gas and food costs rose, impacting the
increase in purchasing power occurring since last June. Even small
changes in the costs of necessity items can put families in the
position of having to take on more debt or not being able to save
as much for the future.”
“The cumulative impacts of inflation have been severe for
middle-income households and go a long way to explaining why
consumer sentiment is so low and credit card debt so high,” said
Amy Crews Cutts, Ph.D., CBE®, economic consultant to Primerica.
“Although worker compensation has been rising, it has not risen as
fast as inflation in the cost of everyday necessity items for which
middle-income households have little room in their budgets to
accommodate.”
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 102.8% 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
85.4%.
Since the baseline of January 2019, the average middle-income
household has cumulatively spent around $2,677 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
and the Federal Reserve. 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 is 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.
About Primerica, Inc.
Primerica, Inc., is a leading provider of financial services 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/20230928660855/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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