Primerica Household Budget Index

Middle-Income Households Saw Improving Financial Conditions in October

Primerica, Inc. (NYSE: PRI), a leading provider of financial services and products 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 middle-income households with incomes between $30,000 and $130,000. In October 2023, the average purchasing power for middle-income households was 99.1%, up from 98.1% in September. A year ago, the index stood at 92.4%.

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Primerica Household Budget Index (HBI) – In October 2023, the average purchasing power for middle-income households was 99.1%, up from 98.1% in September. A year ago, the index stood at 92.4%. Increased earnings and slowing inflation drove an increase in middle-income households’ purchasing power. (Graphic: Business Wire)

“Price levels remain higher for important necessity items, although middle-income families are feeling some relief from the falling price of gasoline and increasing household incomes,” said Glenn J. Williams, CEO of Primerica. “Even with this, going into the holiday season, we expect there will be increased hesitation around spending as a result of the cumulative impact of inflation on monthly budgets.”

“Middle-income households are gaining traction financially, but still have a ways to go before they will feel like they are getting ahead,” said Amy Crews Cutts, Ph.D., CBE an economic consultant to Primerica. “We are seeing income gains, yet it can be hard for middle-income households to get used to the higher prices for basic necessities and this has the potential to impact future spending patterns for these items.”

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 105.1% 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 86.7%.