economy
December 27, 2025
As the cost of living keeps climbing, Americans are 'trying to muscle through' the affordability crisis, analyst says
Rising prices have created an affordability crisis for many Americans. Some consumers are changing behaviors, while others are carrying on as normal.
TL;DR
- 70% of Americans surveyed find the cost of living in their area not very affordable or not affordable at all.
- Nearly half of Americans report their financial situation is worse than a year ago.
- Prices for essentials like coffee and beef have significantly increased, alongside housing and medical costs.
- Consumer spending has increased, but sentiment and confidence have declined.
- Consumers are 'trying to muscle through' higher prices by buying what they normally do.
- Lower earners are actively reducing spending and struggling to make ends meet.
- Consumers are increasingly using credit cards and buy now, pay later (BNPL) plans to fund purchases.
- Credit card debt has risen to $1.23 trillion in the U.S.
- Consumers are dipping into savings, reducing savings rates, and increasing credit card usage.
- Experts predict inflation to remain at or above 3% in 2026, with potential difficulties ahead for employment.
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