Where You Live May Determine Whether You Live Paycheck to Paycheck

Core Insights - A significant number of American households are living paycheck to paycheck, spending over 95% of their income on necessities, with nearly a quarter of households affected in Q3 2025 [2][4] - Inflation rates have risen, with a 3% increase year-over-year in September 2025, while wage growth has lagged behind, increasing only by 2% for middle-income and 1% for lower-income households [3][4] - The Northeast and Midwest regions are experiencing the highest levels of financial strain, with an increase in households living paycheck to paycheck compared to the previous year [6][8] Inflation and Wage Growth - Inflation has outpaced wage growth, leading to households allocating a larger share of their income to basic necessities [8] - The inflation rate in the Midwest has increased modestly, while the Northeast saw a decrease in inflation rates in 2025 compared to 2024 [10][11] Regional Disparities - Households in the Northeast and Midwest are facing greater financial challenges, while those in the South and West have seen a decrease in the percentage of households living paycheck to paycheck [6][8] - The South and West experienced lower inflation rates in 2024, which alleviated some financial stress for households in those regions [9] Economic Implications - The rising cost of living and reduced discretionary spending among consumers could have negative effects on the overall economy [5] - If inflation rates stabilize, it may lead to a decrease in the number of households living paycheck to paycheck [11]