Nearly 24% of American households are living paycheck to paycheck in 2025, according to new analysis from Bank of America Institute released November 1.

Inflation has outpaced wage growth for middle- and lower-income households since January 2025, with inflation climbing 3.0% year-over-year in September while after-tax wages for middle-income households increased only 2% and lower-income households saw just 1% growth.

The financial squeeze is most acute among lower-income Americans, with 29% living paycheck to paycheck—up from 28.6% in 2024 and 27.1% in 2023. In contrast, middle- and higher-income households have experienced little to no increase in their paycheck-to-paycheck rates.

Bank of America researchers define “living paycheck to paycheck” as households spending more than 95% of their income on necessities including housing, gasoline, groceries, utilities, internet, public transportation, and childcare.​

While more households overall are struggling financially, the pace of increase has dropped dramatically—growing nearly three times slower in 2025 than in 2024. The report attributes this to the fact that increases are now concentrated primarily among lower-income households, while higher- and middle-income groups remain stable.

Middle-aged Americans—particularly Millennials and Gen X—have experienced the largest increases in financial pressure. The data shows higher-income Millennials saw their wages grow five percentage points faster than lower-income Millennials, while higher-income Gen X households outpaced their lower-income peers by four percentage points.​

Higher-income Baby Boomers posted wage gains while their lower-income counterparts experienced declines. Meanwhile, Gen Z and Traditionalists have seen minimal increases in paycheck-to-paycheck living.

Regional patterns show the South and West census divisions have the highest concentrations of households living paycheck to paycheck, though these regions have actually seen some easing of financial pressure in 2025. The Northeast and Midwest divisions report the lowest shares of paycheck-to-paycheck households, but these regions experienced increases compared to the previous year.

Since early 2025, wages for lower-income earners have been declining relative to their higher-income counterparts, reversing gains made in 2021-22. Higher-income households may also benefit from “wealth effects” through greater ownership of appreciating assets like stocks and homes, providing an additional buffer against inflation.