The July 2026 edition of the PYMNTS Consumer Expectations Index (PCEI) asked the question: Would an improved national mood carry over into how people feel about their own paychecks? It didn’t.
In August, nine of the index’s 11 measures slipped from July. The overall reading settled at 54.8, down 0.8 points but still well within the narrow 53-to-57 band it has held for 11 straight months. Only personal job security improved, climbing to 80.6, although even this measure remains 5.0 points below its spring peak.
Those increases in job security came from the individuals who need it most. Consumers living paycheck to paycheck and struggling to pay bills saw their job security score gain 4.3 points. This was the largest increase of any group, even as their scores on current household finances, debt manageability and buying conditions all fell further in the same month. So even as work felt steadier, money still seemed tighter.
This edition of the monthly PCEI survey, based on responses from 2,235 U.S. adults fielded Aug. 4–10, 2026, also includes the first results from a new set of questions asking households how their financial lives have changed over the past year. Taken together, the numbers show that, while the country’s financial mood looks stable from a distance, households are sliding into difficulty far more often than they’re climbing out of it.
The Financial Lifestyle Shift
Household finances are 2.7 times as likely to be getting worse as getting better.
Over the past 12 months, 19% of households say their financial lifestyle got worse, while only 7.1% say it got better, a ratio of 2.7-to-1. The rest held steady, with roughly seven in ten households staying within the same financial lifestyles.
The share of households living paycheck to paycheck and struggling to pay bills grew from 18% to 27% over the year. The share not living paycheck to paycheck shrank from 38% to 33%. Eighty-one percent of those who slid into financial difficulty came from those already living paycheck to paycheck without struggling.
Very few households climb out of financial strain. Only 5.2% of households who struggled one year ago had escaped living paycheck to paycheck entirely by August 2026.
What Impacts Financial Stability
Income and savings are the key factors predicting how financial lifestyles shift.
Price difficulties do not determine whose financial lifestyle holds steady and whose falls behind. Among those whose bills became more difficult to pay, 71% of those whose financial lifestyle declined and 76% of those whose financial lifestyle stayed the same say a key reason was the price of essentials outpacing their income. So, consumers can struggle with their rising grocery bills without slipping into financial instability.
Two other factors are better predictors. Household income fell for 33% of households that slid down, against 21% of those that held steady. Thirty-six percent of households whose financial lifestyle declined reported a large, unexpected expense, versus 23% of those that held steady.
Improvements in household finances, meanwhile, usually come from a pay increase. Among those whose bills got easier, 44% credited a rise in household income and 32% said income outpaced essential costs. Falling housing costs are rarely a factor, cited by only 20% of the households whose financial lifestyles improved.
Savings determined whether a household could endure those sudden expenses.
Among households that faced a major, unexpected expense, what separated those whose financial lifestyle became less stable from those whose financial lifestyle held steady was how much they had in the bank when it happened. Among households that were comfortably living paycheck to paycheck a year ago, 66% of those who fell into difficulty said that, in the past 90 days, they had drained their savings or never had any. By contrast, 37% of those who continued to live comfortably and 25% of those who climbed out of paycheck-to-paycheck living said the same.
Additionally, just 26% of the households that declined could cover more than three months of expenses from savings. This compares with 46% of those that held steady and 62% of those that improved.
Their emergency readiness score, a measure of how long a household could sustain its lifestyle on savings and liquid assets if income stopped, reflects a similar pattern. Households that fell scored 32, versus 57 for those that stayed and 64 for those that improved.
Paycheck-to-Paycheck Households at Risk
Nearly one in four households faced a major unexpected expense, with those living paycheck to paycheck and struggling hit hardest.
The consumers least prepared to weather a sudden emergency expense are the ones most likely to face such a cost. Just over one-quarter of all households (28%) faced an unexpected expense of $1,200 or more in the past 90 days. The incidence rate was higher for those under pressure. It reached 34% among households living paycheck to paycheck and struggling to pay bills versus 27% of those not struggling to pay bills and 23% of those who don’t live paycheck to paycheck at all. (For context, this same series found that, in June, 43% of struggling consumers believed they couldn’t cover a $1,200 emergency.)
How consumers pay off those expenses also depends on their financial lifestyle. Among households living paycheck to paycheck and struggling, 36% paid for their largest such expense with cash, checking or savings. For those not living paycheck to paycheck, 56% did the same.
These financially struggling consumers were more likely to turn to costlier or more drastic options instead: a credit card balance carried over time (35% versus 16% of those not living paycheck to paycheck), a loan from family or friends (27% versus 4.3%), a skipped or delayed bill payment (21% versus 0.8%) or a payday loan, cash advance or overdraft (15% versus 2%). They were also more likely to use buy now, pay later (BNPL) plans, at 15% versus 3.5%. A small share in each group (4.2% of struggling consumers and 2.6% of those not living paycheck to paycheck) simply couldn’t cover the expense.
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Methodology
The PYMNTS Consumer Expectations Index (PCEI) is a monthly, survey-based index of financial health among U.S. consumers, scored on a scale of 0 to 100, where 50 represents neutral sentiment. Higher scores mean more positive expectations, and readings below 50 mean net pessimism. The overall index combines 11 dimensions of financial life, organized into three subindices: Personal Financial Resilience, Macroeconomic and Buying Climate, and Labor Market Security. It has typically traded in a narrow band in the mid-50s.
The August 2026 wave was fielded from Aug. 4–10, 2026, and completed by 2,235 qualified U.S. adults, weighted to match key demographics in the census. Labor-market questions apply eligibility rules limiting them to respondents who are employed, self-employed or unemployed and looking for work. The central grouping used throughout this report is financial lifestyle: consumers not living paycheck to paycheck, those who live paycheck to paycheck without issues paying bills, and those who live paycheck to paycheck and struggle to pay bills.
August also marked the first fielding of a new expansion module covering retrospective financial lifestyle, the drivers behind hardship and improvement, savings activity and unexpected expenses. Because the lifestyle-change question relies on respondents’ recollection of their situation a year earlier, this first round of results is best read as a snapshot of where households stand today rather than as a trend. Questions about what drove a change in bills were asked only of households that reported such a change.
