A Pew Research Center analysis finds Americans' finances under strain in a midterm season where affordability is a key issue. Only 47% of middle-income earners, and 24% of lower-income earners, reported being able to save in the past year, and just over half of middle-income adults lack rainy-day funds covering three months of expenses. Across income tiers, most respondents cut back on extras such as eating out or streaming. Pressure may be growing: consumer price index inflation rose from 3.4% to 3.7% in September, above a 3.6% forecast, and inflation-adjusted wages have fallen for six months. Pew also found 78% of middle-income respondents could pay all bills in full in 2026, down from 81% in 2020, while 71% of lower-income adults struggled with at least one basic necessity.
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According to a report from the Institute on Taxation and Economic Policy (ITEP), released on October 8, Trump administration policies could cost a typical middle-income American about $1,700 more in 2026, while the poorest 20% would pay about $750 more and the wealthiest 1% could save about $12,560. The analysis covers tax provisions in the One Big Beautiful Bill Act, the expiration of COVID-era ACA health insurance tax credits, and price increases tied to tariffs, the Iran war and immigration policies. For a middle-income taxpayer, the new tax law saves about $380, while price effects cost about $1,850 and the credit expiration about $230. The White House disputes this view, saying the policies helped stop inflation and support growth and jobs, and some policy experts question how the report calculates costs and benefits.
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- People in China are spending nearly as much of their income as Americans on healthcare
According to a new IMF book on a new economic growth model for China, high healthcare costs are a major reason people in China save rather than spend. In rural China, 8.7% of disposable income goes to healthcare, second only to the US (nearly 9.9%) among 20 major economies, while urban China ranks third at 5.4%. US per capita disposable income was $68,289 at the end of last year, more than 10 times China's 43,377 yuan (around $6,400), and urban disposable income was more than twice rural income (56,502 yuan versus 24,456 yuan). The IMF said targeted increases in government health and social security spending in rural areas could significantly reduce household savings rates, which are about 14% for rural migrants working in cities and about 6% for urban hukou holders. It also noted that falling house prices are weighing on consumption and keeping household savings elevated.
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