Purchasing power reaches highest levels since
February 2022
Primerica, Inc. (NYSE: PRI), a leading provider of financial
services and products in the United States and Canada, released its
Financial Security Monitor™ (FSM™) survey for the fourth quarter of
2023 showing middle-income Americans evenly split on the outlook
for their personal finances. The FSM™ coincides with the
simultaneous release of Primerica’s Household Budget Index™ (HBI™),
which indicates middle-income households saw gains in purchasing
power that outpaced inflation at levels not seen since February
2022 having reached 102.5% in December, up from 100.5% in November
and 96.5% the same time a year ago.
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Primerica Household Budget Index™ (HBI™)
- In December 2023, the average purchasing power for middle-income
households was 102.5%, up from 100.5% in November. A year ago, the
index stood at 96.5%. (Graphic: Business Wire)
“While the Consumer Price Index (CPI) saw a jump of 3.3% in
December, middle-income families saw a much lower increase in the
cost of necessities at 1% over last year,” said Glenn J. Williams,
CEO of Primerica. “Combined with a strong increase in earned
income, the HBI™ rose to 102.5% and began to give families more
breathing room.”
Key Household Budget Index™ Findings
In December 2023, the increase of the HBI™ to 102.5%, was driven
primarily by a continued decline in gas prices (falling by 5.8%), a
significant factor given the prices of other necessities saw slight
increases during the same period. Food and healthcare prices
increased by 0.1% and 0.4%, respectively.
“As we head into 2024, we’re seeing improvements in the
financial well-being of middle-income households as the cost of
necessities like gasoline and heating fuel decline and they
experience real, inflation-adjusted income gains,” said Amy Crews
Cutts, Ph.D., CBE®, economic consultant to Primerica. “It may take
some time with steady improvements before middle-income households
start to feel that they are significantly better off. Nonetheless,
in the Q4 2023 Primerica Financial Security Monitor™ fewer than 70%
of respondents noted that their incomes were falling behind the
cost of living for the first time since the Q1 2022 FSM™
survey.”
Key Findings from Primerica’s U.S. Middle-Income Financial
Security Monitor™
The latest FSM™ survey data shows that exactly half (50%) of
middle-income families report their personal financial situation as
being positive. While this positive sentiment was higher in
December 2021, the even split indicates previously trending
negative perceptions are stabilizing.
- Middle-income Americans continue to be split in their
assessment of their personal finances. Exactly half (50%) say
their personal financial situation is excellent or good, with the
other half saying it is either not so good or poor. In addition, a
large majority (80%) are as concerned or more concerned about their
credit card debt today compared to a year ago, and two-thirds (66%)
don’t know the interest rate for their credit cards.
- Majority of middle-income Americans remain pessimistic about
the state of the economy. Overall, three-fifths (60%) are
pessimistic about the economy over the next year. Broken out by age
group, this includes nearly two-thirds (63%) of respondents ages 18
to 34 and nearly three-quarters (72%) of those ages 35 to 49.
However, a slightly higher share (24%) say they are optimistic
heading into 2024 compared to the December 2022 survey, when just
19% expressed optimism heading into 2023.
- Many are prioritizing reducing and managing debt in the
coming year. When asked for their 2024 financial resolutions,
more middle-income Americans mentioned paying off consumer and
credit card debt (40%) and managing debt load (39%) than tasks like
creating an emergency fund (26%), creating and sticking to a budget
(25%) and investing more in the future (23%). Less than one-quarter
(22%) say they don’t make or follow resolutions. When forced to
choose one, paying off credit card debt (35%) outpaced managing
debt load (18%).
- Lack of time and anxiety are the main drivers in lack of
financial planning. More than a quarter (26%) say they don’t
contribute to a savings account, follow a budget, contribute to an
investment account or set a financial budget each month. Anxiety
(30%) and not having time (20%) continue to be cited as the biggest
challenges people have tracking their financial information.
Primerica Financial Security Monitor™ (FSM™) Topline Trends
Data
Dec.
2023
Sept.
2023
Jun.
2023
Mar. 2023
Dec.
2022
Sep.
2022
Jun. 2022
Mar.
2022
Dec. 2021
How would you rate the condition of your
personal finances? (Reporting “Excellent” and “Good”
responses.)
Analysis: Respondents remain split on
their assessment of their personal finances.
50%
49%
50%
52%
53%
53%
54%
60%
64%
Overall, would you say your income is…?
(Reporting “Falling behind the cost of living” responses.)
Analysis: Concern about meeting the
increased cost of living dropped over the last three months of
2023.
68%
72%
71%
72%
72%
75%
75%
67%
68%
Do you have an emergency fund that would
cover an expense of $1,000 or more (for example, if your car broke
down or you had a large medical bill)? (Reporting “Yes”
responses.)
Analysis: The percentage of Americans who
have an emergency fund that would cover an expense of $1,000 or
more has remained relatively steady over the past year.
60%
62%
61%
58%
59%
60%
61%
62%
60%
How would you rate the economic health of
your community? (Reporting “Not so good” and “Poor” responses.)
Analysis: Respondents’ rating of the
economic health of their communities has remained relatively steady
over the past year.
57%
55%
54%
59%
53%
55%
58%
52%
50%
How would you rate your ability to save
for the future? (Reporting “Not so good” and “Poor” responses.)
Analysis: More than 70% continue to feel
it will be difficult to save for the future.
73%
71%
71%
73%
74%
73%
72%
66%
62%
About Primerica’s Middle-Income Financial Security Monitor™
(FSM™)
Since September 2020, the Primerica Financial Security Monitor™
has surveyed middle-income households quarterly to gain a clear
picture of their financial situation, and it coincides with the
release of the monthly HBI™ four times annually. Polling was
conducted online from December 5 – 12, 2023. Using Dynamic Online
Sampling, Change Research polled 1,150 adults nationwide with
incomes between $30,000 and $130,000. Post-stratification weights
were made on gender, age, race, education and Census region to
reflect the population of these adults based on the five-year
averages in the 2021 American Community Survey, published by the
U.S. Census. The margin of error is 3.3%. For more information
visit Primerica.com/public/financial-security-monitor.html
About the Primerica Household Budget Index™ (HBI™)
The Primerica Household Budget Index™ (HBI™) is constructed
monthly on behalf of Primerica by its chief economic consultant Amy
Crews Cutts, PhD, CBE®. The index measures the purchasing power of
middle-income families with household incomes from $30,000 to
$130,000 and is developed using data from the U.S. Bureau of Labor
Statistics, the US Bureau of the Census, and the Federal Reserve
Bank of Kansas City. The index looks at the cost of necessities
including food, gas, utilities, and health care and earned income
to track differences in inflation and wage growth.
The HBI™ is presented as a percentage. 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 time prior to the COVID-19
pandemic.
Periodically, prior HBI™ values may be revised due to revisions
in the CPI series and Consumer Expenditure Survey releases by the
U.S. Bureau of Labor Statistics (BLS). Beginning with the October
2023 release of the HBI™ data, health insurance costs will no
longer be included in the calculation of the HBI™ data as part of
the healthcare component because of some newly acknowledged
methodology that has been used by the BLS to calculate the health
insurance CPI. The health insurance CPI, as calculated by BLS, does
not measure consumer costs of health insurance such as the cost of
premiums paid or a combination of premiums and deductibles, but
rather premium values retained by health insurers we do not believe
it accurately reflects consumer experiences. The healthcare
component will continue to include medical services, prescription
drugs and equipment. Prior published values have been adjusted to
reflect this change. For more information visit
householdbudgetindex.com.
About Primerica, Inc.
Primerica, Inc., headquartered in Duluth, GA, is a leading
provider of financial products and services to middle-income
households in North America. Independent licensed representatives
educate Primerica clients about how to better prepare for a more
secure financial future by assessing their needs and providing
appropriate solutions through term life insurance, which we
underwrite, and mutual funds, annuities and other financial
products, which we distribute primarily on behalf of third parties.
We insured over 5.7 million lives and had over 2.9 million client
investment accounts on December 31, 2023. Primerica, through its
insurance company subsidiaries, was the #3 issuer of Term Life
insurance coverage in the United States and Canada in 2022.
Primerica stock is included in the S&P MidCap 400 and the
Russell 1000 stock indices and is traded on The New York Stock
Exchange under the symbol “PRI”.
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Public Relations Gana Ahn 678-431-9266 gana.ahn@primerica.com
Investor Relations Nicole Russell, 470-564-6663
nicole.russell@primerica.com
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