Primerica Household Budget Index™: Stable Purchasing Power for Middle-Income Americans in August

09/30/2025 – 12:00 AM

DULUTH, Ga. – Primerica’s latest Household Budget Index™ (HBI™) reveals a slight but noteworthy upward trend in the financial pressures facing middle-income families. The August reading of 100.2% indicates a 0.1% increase from the previous month and a 0.8% rise year-over-year, signaling a continued erosion of household purchasing power. This index serves as a crucial economic barometer, meticulously tracking the impact of inflation and wage fluctuations on the affordability of everyday essentials for families earning between $30,000 and $130,000 annually.

While the widely cited Consumer Price Index (CPI) registered a 2.9% inflation increase in August compared to last year – the most rapid pace since January – a more granular analysis focusing specifically on the spending habits of middle-income households reveals a steeper climb. Primerica’s HBI™ data indicates a 3.3% year-over-year inflation rate when adjusted to reflect the unique consumption patterns of this demographic. This discrepancy highlights the critical need for targeted economic indicators to accurately gauge the financial health of specific segments within the broader economy.

The core challenge lies in the rising cost of necessities. The HBI™’s composite of essential items – encompassing food, utilities, gasoline, auto insurance, and healthcare – paints a concerning picture. These combined expenses have surged by 3.1% for middle-income Americans, outpacing wage growth in many sectors. This inflationary squeeze disproportionately impacts lower and middle-income families, who allocate a larger percentage of their income to these essential goods and services, leaving less discretionary income for savings, investment, or other discretionary spending.

Experts at Primerica argue that understanding these nuances is vital for informed economic policymaking. By differentiating between overall inflation and the specific inflationary pressures impacting middle-income households, policymakers can better tailor interventions aimed at bolstering consumer confidence and driving sustainable economic growth. The HBI™ provides a critical lens through which to view the real-time economic struggles of a demographic that accounts for over 55% of the U.S. population and wields significant influence over consumer spending patterns. The index utilizes January 2019 as its baseline, with the value set to 100% at that point in time.

The HBI™, constructed monthly with insights from economic consultant Amy Crews Cutts, PhD, CBE®, leverages data from the U.S. Bureau of Labor Statistics, the U.S. Bureau of Census, and the Federal Reserve Bank of Kansas City. This comprehensive dataset allows for a precise measurement of the gap between the cost of essential goods and services and earnings, providing a reliable indicator of the financial well-being of middle-income families. Prior HBI™ values are subject to revisions due to updates in the CPI series and Consumer Expenditure Survey releases by the U.S. Bureau of Labor Statistics (BLS). Expenditure weights are updated periodically to align with the most recent Consumer Expenditure Survey data. Auto insurance was recently added to the group of necessity items in December 2024.

Primerica, Inc., a leading provider of financial products and services to middle-income households in North America, emphasizes the importance of financial literacy and preparedness. The company utilizes independent licensed representatives to educate clients on financial planning, offering solutions ranging from term life insurance to mutual funds and annuities. Primerica, through its insurance company subsidiaries, held a significant position as a top issuer of Term Life insurance coverage in the United States and Canada in 2024. 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”.