![]() ![]() The Primerica Household Budget Index™ (HBI™) is constructed monthly on behalf of Primerica by its chief economic consultant Amy Crews Cutts, PhD, CBE®. The HBI™ removes infrequently purchased or predictable expense items and focuses solely on the purchasing patterns of middle-income households, defined as those with incomes of $30,000-$130,000.Ībout the Primerica Household Budget Index™ (HBI™) While the Consumer Price Index (CPI) provides a comprehensive measure of inflation, it does not offer a clear picture of how the change in prices of necessities impacts middle-income households because it is weighted to include all income levels and aggregates expenses for rarely purchased items, as well as expenses for which households can plan.Ĭhart 3: Comparison of Measures of Inflation: Consumer Price Index versus HBI-weighted CPI for Middle-Income Households. There is not currently a consistent measure to track middle-income households’ purchasing power. “Middle-income households finally are pulling ahead, but the last 18-months of inflation has caused many to fall behind which accounts for the rising credit card debt we are currently seeing,” said Cutts. In line with this, if the pandemic and ensuing inflation would not have been a factor, the HBI™ today would be closer to 110%.Ĭhart 2: Inflation versus Growth in Earned Income for Middle-Income Households. Since the baseline of January 2019, the average middle-income household has cumulatively spent around $3,150 more than budget on basic necessities. “The July index illustrates how deeply middle-income households were affected by the recent period of high inflation in which their income gains fell behind the rising cost of living expenses,” said Amy Crews Cutts, Ph.D., CBE®, economic consultant to Primerica. “The principles we teach, coupled with this ongoing research, will help families in their efforts to achieve financial security.” “Understanding the purchasing power of middle-income households from month-to-month will make our guidance even more precise as we serve the financial needs of middle-income families,” said Glenn J. ![]() In July 2023, the index rose slightly to 97.5% from 97.0% in June 2023. Increasing inflation then caused the index to plummet. This means that compared to January 2019, households were in a stronger financial position to pay their monthly bills because wage growth outpaced the cost of everyday goods. This point in time reflects a recent “normal” economic time prior to the COVID-19 pandemic.īetween 20, the HBI™ results recorded steady gains in purchasing power for middle-income families, with a peak of 102.8% in November 2020. 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 index uses January 2019 as its baseline. ![]() When the index is above 100%, this means middle-income households 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. The HBI™ data is presented as a percentage. View the full release here: Ĭhart 1: Primerica HBI™ (Graphic: Business Wire) It also evaluates whether there are opportunities for middle-income families to save money or pay down debt versus use savings or increase debt. The HBI™ looks at the difference between the growth in earned income and the change in the costs for necessities like food, utilities, health care, and gasoline to understand how the current economy is impacting middle-income households’ ability to maintain a budget. (NYSE: PRI), a leading provider of financial services in the United States and Canada, announced today the release of its inaugural Primerica Household Budget Index™ (HBI™), a monthly index illustrating the purchasing power of middle-income households with incomes between $30,000 and $130,000. New monthly index shows middle-income families are seeing increased spending power, yet still recovering from previous 18-months of high inflationĭULUTH, Ga.-(BUSINESS WIRE)- Primerica, Inc. ![]()
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