Yahoo Finance Live examines how more Americans find themselves living paycheck to paycheck as prices for food and consumer goods continue to rise across retailers.
RACHELLE AKUFFO: Many Americans are struggling to make ends meet, as surging inflation has energy prices up about 42% and food prices up more than 12% versus last year. People are increasingly turning to dollar and discount stores for their groceries. Now, according to a recent report by the LendingClub, roughly 157 million Americans are living paycheck to paycheck. It seems like there's no sight yet of prices easing fast enough to really meet the demand that people have. Seana, what's your take on this?
SEANA SMITH: I mean, Rachelle, it's something we talk about time and time again. More and more people are struggling to make ends meet. When you take a look at the latest CPI report, you see it in just the food prices. Bread up just about 11%. Dave, meat up 8%. Beef and Veal up 4%. Poultry up 17%. Clearly, far outpacing the gains that we've seen in wages. People are finding it harder and harder to go to the grocery store and stay within their budget. And it's affecting their everyday life, obviously.
DAVE BRIGGS: Yeah, everybody has to cut back in some way. It is interesting, though, when you look at some of the earnings, and you've heard some comments like unrestrained consumer spending from companies like Visa. So there seems to be a strange dynamic where people are cutting back in spending, but then you have a lot of consumer-facing companies in their earnings reports saying they see no pullback whatsoever in certain types of spending.
It is a positive investor story, if you will though. Costco's up 27% over the last 12 months. Dollar General is up. Dollar Tree is up 70% thus far year to date. So it has been a positive story if you are an investor in dollar stores, or in Costco, or other discount chains as well.
SEANA SMITH: Yeah, and I wonder whether or not we've reached this point, right? So the consumers have been willing to spend more and more. But maybe now, are we edging up against that level where we're starting to see an inflection point and maybe people will start pulling back in the current quarter, Rachelle. Many companies are saying they aren't seeing it yet. It's hard to keep buying it, though, at this point.
RACHELLE AKUFFO: And one of the things we have to watch is a lot of the gains that these companies are seeing are from the higher prices-- not necessarily people buying a larger volume of food products. And we're seeing, actually, a large increase in terms of food banks struggling, obviously, they're food subsidized, but they're still seeing that biting into the food that they're able to give people who are struggling.
So perhaps at the bottom end, people who aren't earning as much, really struggling. So we might not be getting the whole picture when we hear from some of these companies in terms of how well things are going for consumers.
SEANA SMITH: Yeah, I think that's right. And we'll continue, obviously, to stay on this story.