In the August results, released Monday (Sept. 15), the pace of spending slowed, although many households across all income levels ponied up for large-ticket purchases as summer wound on. The trend implies that at least some spending was pulled forward ahead of the fall and the eventual holiday shopping season.
In August, the median year-over-year increase in monthly household spending softened to 4.1%, down from 4.5% in April. This was the slowest pace since April 2021. Declines were recorded across all demographics.
According to the data, 60.8% of households made a “large purchase” over the past four months, an increase from 53.5% in April and the highest level since August 2023, after two consecutive declines.
As for the allocation of that spending, households earning less than $50,000 annually saw the biggest increase, with 46% making a large purchase, up from 39% in April. Among households earning more than $100,000, 77% made a large purchase, up from 70% in April.
Seasonal spending on vacations rose, with 30% of households reporting such a purchase. This was 40% higher than in April and 9% above last year’s level. Electronics and vehicle purchases were reported by 17% and 12% of households, respectively, both up 10 percentage points. Home appliances were bought by 13% of households and furniture by 10%.
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Housing-related spending also increased. Home purchases rose to 2.5% of households, a 20% increase from April, while 20% undertook renovations, up 15%. Low-income households (those earning less than $50,000) led in home buying, with 3.2% purchasing a home, a 21% increase from April. By contrast, 2.3% of households earning over $100,000 and 1.7% of those earning between $50,000 and $100,000 purchased a home.
Some Paycheck Fluctuations
Income variability remained stable at a high level. The data showed that 80% of households reported monthly income fluctuations of less than 5%, 17% reported fluctuations of 5% to 15%, and 3% reported fluctuations of more than 15%. Middle-income households reported record stability, with 83% experiencing income variation under 5%, the highest since 2018. In contrast, 74% of low-income households reported stable income, the lowest since the series began.
The PYMNTS Intelligence report “Financial Fragility in the Middle: How Income and History Shape Consumer Risk” found that about 46% of once-stable consumers live paycheck to paycheck. More than two-thirds of households fall under that definition, where take-home pay is barely enough to make ends meet. Separately, PYMNTS Intelligence research revealed that 21% of consumers in the United States, or 37 million people, live paycheck to paycheck primarily out of necessity.
What Lies Ahead
Looking ahead, households expect spending to continue rising but at a slower pace, with the median 12-month expectation at 3%. Expected growth in essential spending remained nearly steady at 4.7%, after spiking in April, while expected non-essential spending doubled to 2%. Utilities and education showed the largest expected increases, while clothing declined. Electronics were the only category of large purchases where households expected higher spending than in April.
Finally, households’ plans for a hypothetical 10% income change remained largely unchanged. On average, they would allocate half of an income gain to savings or investments, 33% to debt repayment, and 17% to spending or donations.
