America's Upper Middle Class is Being Squeezed in 2022
New York, NY, July 26, 2022-The U.S. upper middle class is no longer making the financial gains it did in the pandemic and is feeling the squeeze of inflation intensely, reports the Wall Street Journal.
“The richest families, meanwhile, have been hurt by market losses but have been insulated from the worst of inflation. Goods that have had the sharpest price jumps, such as gasoline, automobiles and home utilities, account for a relatively small percentage of their spending.
“Over the first three months of 2022, upper-middle-class families lost a bigger chunk of their stock portfolios than the people who make more than them, according to the Federal Reserve. Since the pandemic started, they saved less than most of the people who make less than them, according to Moody’s Analytics.
“The value of their liabilities grew by 2% in this year’s first quarter, more than any other group, as they took on greater debt for auto loans, credit cards and other consumer credit.
“Upper-middle-class households are defined here as those earning between $75,301 and $127,300 a year, according to the Fed. They make more money than at least 60% of other households, but less money than the top 20% of earners.
“Economists at Bank of America Corp. estimate that upper-middle-class households, as well as the group right below them, are feeling inflation more than other income groups. These households spend a bigger portion of their budgets on driving expenses, since they tend to live in suburbs or more rural areas and commute into cities, they said.
“Many of these workers got unemployment benefits during the pandemic, but the benefits didn’t pay as much as their jobs did-unlike lower-wage workers, who often got more money from unemployment benefits than from working. Their savings on travel and events during pandemic lockdowns was less pronounced than that of higher-income households with more discretionary spending power.”