American Middle-Income Families’ Purchasing Power Increasing

Spending power for middle-income families has reached its highest level since February 2021, the latest Primerica Household Budget Index (HBI) revealed.

The average purchasing power for middle-income families in August was 102.2%, up from 101.5% in July 2024, which is 5% higher than a year ago, when the index stood at 97.2%.

If the index is above 100%, the purchasing power of middle-income families is stronger than in the baseline period and they may have extra money left over at the end of the month that can be applied to things like entertainment, extra savings or debt reduction.

If it is under 100%, households may have to reduce overall spending to levels below budget, reduce their savings or increase debt to cover expenses.

The HBI uses January 2019 as its baseline. This point in time reflects a recent ‘normal’ economic environment prior to the COVID-19 pandemic.

Middle-income households have benefited from falling gas and utilities prices along with steady food prices.

The data comes from the monthly Primerica HBI, which illustrates the purchasing power of middle-income households with income between $30,000 and $130,000.

The index is developed using data from the US Bureau of Labor Statistics, the US Bureau of the Census, and the Federal Reserve Bank of Kansas City.

It looks at the cost of necessities including food, gas, utilities and healthcare, comparing these with earned income to track differences in inflation and real wage growth.