Florida gubernatorial candidate Rep. Byron Donalds, R-Fla., argues that Democratic policies fueled the affordability crisis in The Evening Edit.
Middle-income Americans are facing an economic hangover from inflation in recent years, and that has led to it increased pessimism about their financial prospects, a new analysis shows.
A report from Primerica shows that by the third quarter of 2025, only 21% of middle-income Americans believe they will be in trouble. better off financially in the coming year, while 34% think they will be worse off and 33% expect their situation to remain the same.
These numbers are considerably more pessimistic than the company’s Q3 2020 data showed: 33% of middle-income Americans thought they would be better off financially in the coming year, while only 17% thought they would be worse off and 40% expected they would be about the same.
“The inflation hangover is not only tightening daily budgets – it is also affecting the financial base that families work hard to build,” Primerica wrote. “For households already on tight budgets, even a modest increase in essential costs could force tough decisions: tapping into savings, increasing credit card debt or delaying retirement investments.”
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The Primerica report shows that middle-income Americans are suffering from an “inflation hangover” after several years of price increases. (Getty Images)
The report notes that the share of middle-income households rating their personal finances as ‘poor’ or ‘not so good’ rose from 32.2% in the first quarter of 2021 to a peak of 55% in the third quarter of 2024, up from 45.5% in the third quarter of 2025.
It also noted that the share of respondents who said they are paying them off credit card balances Each month, inflation overall has fallen significantly, from around 47% in the first quarter of 2021 to 29% in the third quarter of 2025, despite inflation slowing from the highs reached in 2022.
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Middle-income households are more pessimistic about their financial prospects for the coming year than they were five years ago. (iStock)
This is evident from data from Primerica’s Household Budget Index costs for necessities such as food, gas and utilities are outpacing income growth for middle-income households as the cost of necessities has risen 32.7% since January 2021 – well above the 23.5% increase in middle-income wages over that period.
As households deal with financial challenges by, for example, postponing major purchases or investments, tapping into savings or increasing 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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Household necessities have risen in price in recent years due to high inflation. (Justin Sullivan/Getty Images)
“Delaying contributions to retirement accounts or reducing savings isn’t just losing ground right now – it’s creating a widening gap that will become harder to close over time. Even if wage growth starts to outpace inflation, the gap left by years of higher costs won’t be filled quickly,” Primerica said.
The report also surveyed middle-income households about what aspects of their finances are a source of stress right now, and 55% of respondents said inflationwhile 47% said they were concerned about being able to cover the costs of an emergency.
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Nearly half, 46%, of respondents said debt and having enough money to enjoy daily life were sources of stress, while 42% said monthly bills, and only 12% said nothing is putting them under financial strain right now.
