Americans get poorer as expenses surge

foxbusiness.com:

Breitbart’s John Carney evaluates the state of the economy under President Biden on 'Kudlow.'

Americans are getting poorer as expenses climb and savings dwindle, according to a new survey from LendingClub Corporation, the parent company of LendingClub Bank, a digital marketplace bank. 

In May 2023, the Fed released the «Economic Well-Being of U.S. Households in 2022,» the latest edition of an annual report commonly used in measurements of financial well-being. Since 2013, these annual reports have tracked consumers’ stated ability to afford a theoretical $400 emergency expense — a number that seems outdated in today’s economic environment, LendingClub reported. 

LendingClub and PYMNTS have examined this issue since 2022 and have found that the $400 benchmark does not accurately reflect today’s consumer experience, per a press statement. «In fact, two-thirds of the unexpected expenses consumers experienced cost more than the benchmark of $400, with 41% spending double that amount or more,» the statement said. «Furthermore, the average emergency expense was approximately $1,700, reflecting a year-over-year growth of 16 percent.»

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Utility bills on a table. (iStock)

Alia Dudum, money expert with LendingClub, says this study ultimately shows that the Fed’s $400 emergency expense benchmark, which has remained the same for 10 years, is no longer an accurate figure to use when assessing a consumer's overall financial well-being as it doesn't factor in inflation over the last decade or address the macroeconomic volatility we've seen since the beginning of the pandemic.

For example, she added, two-thirds of the unexpected expenses consumers experienced cost more than the