Living Paycheck to Paycheck? Your City Could Be the Culprit

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 trend of households living paycheck to paycheck is more pronounced in the Northeast and Midwest, while the South and West have seen a decrease in this trend [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 West increased by 3.3% in September 2025, while the Northeast experienced a lower inflation rate compared to 2024 [10][11] Regional Disparities - Households in the Northeast and Midwest are facing the highest financial pressures, with an increase in the percentage of those living paycheck to paycheck compared to the previous year [6][8] - Conversely, households in the South and West have experienced lower inflation rates in 2024, easing financial stress and allowing their income to stretch further [9][10] Economic Implications - The rising cost of living and reduced discretionary spending among consumers could lead to broader negative effects on the economy [5] - If inflation levels out, it may positively impact the number of households living paycheck to paycheck [12]