U.S. households are spending more but earning less, squeezing household budgets, a new Pew Charitable Trusts report finds.
Wall Street Journal staffer Jeffrey Sparshott taps into the Pew report, which compares household spending among adults aged 20 to 60, across several key categories, as well as expenditures by income range, in two time periods, 1996 and 2014. Sparshott notes that housing, transportation and food drove much of the rise in spending, leaving families with less financial wiggle room. He writes:
“That increase in the cost for shelter is a really important piece about why families at the bottom don’t feel financially stable,” said Erin Currier, director of the financial security and mobility project at Pew. “So many families are walking a financial tightrope—their core needs are getting more expensive and incomes aren’t rising to meet those costs.”
That’s left many running a personal budget deficit despite spending less on restaurants, entertainment and other discretionary goods and services. Pew’s analysis found that in 2004, a typical household in the lower third had $1,500 left over after expenses. By 2014, such households were $2,300 in the red.