Primerica Household Budget Index™: Purchasing Power for Middle-Income Families Rose 2.8% in November Compared to a Year Ago

Rhea-AI Summary

Primerica (NYSE: PRI) released its monthly Household Budget Index™ (HBI™) showing improved purchasing power for middle-income households. The index, which tracks families with incomes between $30,000 and $130,000, reached 103.6% in November 2024, up from 103.1% in October 2024. This represents the seventh consecutive monthly increase and marks a 2.8% improvement from the previous year.

The purchasing power has reached its highest level since January 2021, primarily driven by declining gas prices and stable costs for other necessity goods. The HBI™ serves as an indicator of financial health for middle-income families in the United States and Canada.

Positive

• Purchasing power increased for 7 consecutive months
• HBI™ rose to 103.6% in November 2024, up 0.5% month-over-month
• Year-over-year improvement of 2.8% in purchasing power
• Highest purchasing power level since January 2021

Negative

• None.

Insights

Economic Research Analyst

The latest Primerica Household Budget Index™ data reveals a compelling economic narrative with direct implications for consumer spending and market dynamics. The 2.8% year-over-year increase in middle-income purchasing power, reaching 103.6%, represents the strongest level since January 2021. This sustained improvement over seven consecutive months suggests a structural shift in consumer financial health.

The declining gas prices, coupled with stabilizing costs of necessity goods, creates a positive feedback loop in the economy. When middle-income households (earning between $30,000 and $130,000) experience increased purchasing power, it typically translates into higher discretionary spending, benefiting retail, consumer services and entertainment sectors. This demographic represents a important consumer segment that drives approximately 40% of U.S. consumer spending.

For investors, this trend signals potential upside for consumer discretionary stocks and retail sectors in the coming quarters. The sustained improvement in household purchasing power could catalyze increased consumer confidence and spending patterns, particularly beneficial for companies targeting middle-income consumers. The timing of this improvement, coinciding with the holiday season and extending into the new year, suggests a potentially stronger-than-expected Q4 2024 retail performance.

Market Research Analyst

For Primerica (PRI), this index serves as a powerful marketing and credibility tool, reinforcing their position in the middle-income financial services market. The company's ability to track and report on middle-income household economics demonstrates their deep market understanding and commitment to their core demographic. This strengthens their brand positioning and could enhance client acquisition and retention rates.

The index's findings are particularly relevant for PRI's business model. As middle-income families gain more purchasing power, they're more likely to invest in financial products and services. The 0.5% month-over-month improvement suggests a gradual but steady enhancement in their target market's financial capacity. This environment typically correlates with increased sales of life insurance, investment products and other financial services that form PRI's core offerings.

DULUTH, Ga.--(BUSINESS WIRE)-- Primerica, Inc. (NYSE: PRI), a leading provider of financial services and products in the United States and Canada, announced today the release of the Primerica Household Budget Index™ (HBI™), a monthly index illustrating the purchasing power of middle-income households with income between $30,000 and $130,000. In November 2024, the average purchasing power for middle-income families was 103.6%, up from 103.1% in October 2024. This marks the seventh consecutive month purchasing power rose for middle-income families. Spending power is at its highest level since January 2021 and is up 2.8% from a year ago. The recent recovery is driven primarily by gas prices continuing to fall in November while the cost of other necessity goods remained steady.

Primerica Household Budget Index™ - In November 2024, the average purchasing power for middle-income families was 103.6%, up from 103.1% in October 2024. This marks the seventh consecutive month purchasing power rose for middle-income families. Spending power is at its highest level since January 2021 and is up 2.8% from a year ago.

For more information on the Primerica Household Budget Index™, visit www.householdbudgetindex.com.

About the Primerica Household Budget Index™ (HBI™)

The Primerica Household Budget Index™ (HBI™) is constructed monthly on behalf of Primerica by its chief economic consultant Amy Crews Cutts, PhD, CBE®. The index measures the purchasing power of middle-income families with household incomes from $30,000 to $130,000 and is developed using data from the U.S. Bureau of Labor Statistics, the U.S. Bureau of the Census, and the Federal Reserve Bank of Kansas City. The index looks at the cost of necessities including food, gas, utilities, and health care and earned income to track differences in inflation and wage growth.

The HBI™ is presented as a percentage. If the index is above 100%, the purchasing power of middle-income families is stronger than in the baseline period and they may have extra money left over at the end of the month that can be applied to things like entertainment, extra savings, or debt reduction. If it is under 100%, households may have to reduce overall spending to levels below budget, reduce their savings or increase debt to cover expenses. The HBI™ uses January 2019 as its baseline. This point in time reflects a recent “normal” economic time prior to the COVID-19 pandemic.

Periodically, prior HBI™ values may be revised due to revisions in the CPI series and Consumer Expenditure Survey releases by the U.S. Bureau of Labor Statistics (BLS). Beginning with the October 2023 release of the HBI™ data, health insurance costs will no longer be included in the calculation of the HBI™ data as part of the healthcare component because of some newly acknowledged methodology that has been used by the BLS to calculate the health insurance CPI. The health insurance CPI, as calculated by BLS, does not measure consumer costs of health insurance such as the cost of premiums paid or a combination of premiums and deductibles, but rather premium values retained by health insurers. We do not believe it accurately reflects consumer experiences. The healthcare component will continue to include medical services, prescription drugs and equipment. Prior published values have been adjusted to reflect this change. For more information visit householdbudgetindex.com.

About Primerica, Inc.

Primerica, Inc., headquartered in Duluth, GA, is a leading provider of financial products and services to middle-income households in North America. Independent licensed representatives educate Primerica clients about how to better prepare for a more secure financial future by assessing their needs and providing appropriate solutions through term life insurance, which we underwrite, and mutual funds, annuities and other financial products, which we distribute primarily on behalf of third parties. We insured approximately 5.7 million lives and had approximately 2.9 million client investment accounts on December 31, 2023. Primerica, through its insurance company subsidiaries, was the #2 issuer of Term Life insurance coverage in the United States and Canada in 2023. Primerica stock is included in the S&P MidCap 400 and the Russell 1000 stock indices and is traded on The New York Stock Exchange under the symbol “PRI”.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241229899335/en/

Public Relations

Gana Ahn, 678-431-9266

gana.ahn@primerica.com

Investor Relations

Nicole Russell, 470-564-6663

nicole.russell@primerica.com

Source: Primerica, Inc.

FAQ

What is the current Primerica Household Budget Index (HBI) value for November 2024?

The Primerica Household Budget Index value for November 2024 is 103.6%, up from 103.1% in October 2024.

How much has PRI's Household Budget Index increased year-over-year in November 2024?

The Primerica Household Budget Index has increased by 2.8% compared to November 2023.

What income range does the Primerica Household Budget Index track?

The Primerica Household Budget Index tracks middle-income households with incomes between $30,000 and $130,000.

What factors drove the improvement in Primerica's HBI for November 2024?

The improvement was primarily driven by falling gas prices and stable costs for other necessity goods.

How many consecutive months has PRI's Household Budget Index shown improvement?

The Household Budget Index has shown improvement for seven consecutive months as of November 2024.