Hourly Wage Drop Foreshadows a $14B Hit to Consumer Spending

The “Wage to Wallet Index: Wage Volatility’s $14B Consumer Spending Gap,” a collaboration between PYMNTS Intelligence, WorkWhile and Ingo Payments, offers a detailed look inside the U.S. Labor Economy at a moment when small shifts in wages are delivering outsized consequences for spending, confidence and debt. Using proprietary modeling and monthly wage data for 60 million workers earning under $25 per hour, this latest installment of the Wage to Wallet Index shows how October’s seemingly modest 0.81% drop in hourly pay translates into a large and uneven hit to household spending power. Because these workers operate with thin savings, volatile scheduling and rising reliance on credit, even small changes in earnings quickly cascade into real economic pressure.

The report highlights the widening divide between younger and older consumers amid intensifying economic volatility. Millennials and Gen Z absorbed most of October’s spending pullback. Together, the two generations account for more than $10 billion of the implied annualized reduction. Lower-income households faced similarly disproportionate pressure, with those earning under $30,000 taking the steepest hit. Job security sentiment declined sharply, dropping 7.6 points in a single month, even as other sentiment components were relatively stable. This divergence suggests that workers may feel employed today, but are increasingly uncertain about the future stability of their hours or income.

Credit reliance also continues to climb. More than one-third of Labor Economy workers revolve credit card balances. Their average balances represent more than 22% of annual income—a far heavier burden than that of higher-earning consumers. With interest rates still elevated and credit access tightening at the margins, the Labor Economy faces a worsening cycle of wage softness, higher borrowing costs and constrained spending capacity.

In this report, learn how:

Wage volatility moves through the economy with amplified force among hourly workers. Small pay adjustments create immediate changes in consumption patterns because this segment has little ability to buffer shortfalls.

Generational and income divides shape where financial stress accumulates most intensely. The data reveals which households are most exposed to fluctuating hours and delayed pay cycles—and why these patterns matter for forecasting demand.

Credit usage, debt burden and credit score profiles signal growing fragility within the Labor Economy. The report details how rising reliance on revolving debt, combined with wage softness, elevates financial risk for millions of workers.

Download the “Wage to Wallet Index: Wage Volatility’s $14B Consumer Spending Gap” to learn more.

Inside “Wage to Wallet Index: Wage Volatility’s $14B Consumer Spending Gap”

“Wage Volatility’s $14B Consumer Spending Gap” is a collaboration between PYMNTS Intelligence, WorkWhile and Ingo Payments. PYMNTS Intelligence built a proprietary model to estimate the spending power of the Labor Economy and its month-to-month changes. The model integrates official government statistics on consumer spending, income and labor force composition with customized demographic and occupational mapping to isolate the Labor Economy share of total outlays. Controlled interpolation and projection techniques tied to macroeconomic benchmarks generate aggregate estimates of wage shifts and their implied impact on consumer spending. This framework allows us to quantify the scale and economic significance of a large but often undermeasured slice of the workforce while protecting the proprietary nature of our underlying calculations.