Inflation’s lasting sting deepens pessimism among middle-income Americans

Middle-income Americans have been facing an economic hangover from inflation for the past several years, and that has exacerbated the problem. Increased pessimism About their financial outlook, a new analysis finds.

A report by Primerica found that in the third quarter of 2025, only 21% of middle-income Americans believe they will be Better off financially Next year, while 34% believe they will be worse off and 33% expect their situation to remain the same.

These numbers are significantly more pessimistic than what company data from the third quarter of 2020 showed, when 33% of middle-income Americans thought they would be better off financially in the next year versus just 17% who thought they would be worse off, and 40% who expected them to be about the same.

“The effects of inflation not only tighten everyday budgets, they also negatively impact the financial foundation that families work so hard to build,” Primerica wrote. “For families already balancing tight budgets, modest increases in essential costs can force difficult decisions: tap into savings, add credit card debt, or delay retirement investments.”

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The report indicated that the percentage of middle-income families who classify their personal financial resources as “weak” or “not very good” increased from 32.2% in the first quarter of 2021 to a peak of 55% in the third quarter of 2024, while it was 45.5% in the third quarter of 2025.

It also indicated the percentage of respondents who said they pay their wages Credit card balances in full each month fell significantly from about 47% in the first quarter of 2021 to 29% in the third quarter of 2025, although inflation slowed from its highs in 2022.

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Middle-income households are more pessimistic about their financial prospects for next year than they were five years ago. (Istock)

Primerica’s Household Budget Index data showed this Costs of necessities Such as food, gas and utilities, are outpacing income growth for middle-income households, with the cost of necessities rising 32.7% since January 2021 — far higher than the 23.5% rise in middle-income wages over that period.

As families deal with financial challenges by doing things like postponing purchases or large investments, Take advantage of savings Or on top of credit card debt, it can have a long-term impact as families look to get back on track with their financial goals.

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Prices of household necessities have risen in recent years amid rising inflation. (Justin Sullivan/Getty Images)

“Deferring contributions to retirement accounts or cutting back on savings not only loses ground now, but creates an ever-widening gap that is difficult to close over time,” Primerica said. “Even if wage growth begins to outpace inflation, the gap left by years of rising costs cannot be closed quickly.”

The report also surveyed middle-income families about aspects of their finances that constitute sources of stress at this time, and 55% of participants said Economic inflationWhile 47% said they were concerned about their ability to cover expenses in emergency situations.

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Nearly half of respondents, 46%, said debt and having enough money to enjoy daily life were sources of stress, while 42% said monthly bills, and only 12% said nothing was currently stressing them financially.