Primerica Household Budget Index™: Uncertainty Continues to Increase for Middle-Income Families Over Rising Cost of Necessities and Leveling of Income Growth

Rhea-AI Summary

Primerica's Household Budget Index™ (HBI™) reveals continued financial pressure on middle-income families in February, with purchasing power falling to 99.4%, down 0.3% month-over-month but up 0.4% year-over-year. For households earning around $60,000 annually, necessity goods cost approximately $110 more in February compared to January.

Key factors impacting middle-income budgets include:

• Auto insurance costs rose 0.9% in February and over 11% in 12 months
• Gasoline prices increased 1.3% month-over-month
• Overall Consumer Price Index (CPI) reached 2.8%
• Adjusted CPI for middle-income households shows 3.6% year-over-year increase
• Necessity items (food, utilities, gas, auto insurance, health care) saw a 4.2% year-over-year increase

Positive

• Purchasing power showed 0.4% improvement year-over-year

Negative

• Purchasing power declined 0.3% month-over-month to 99.4%
• Necessity goods cost increased by $110 in February vs January
• Auto insurance costs surged 11% over 12 months
• Gasoline prices reversed previous declining trend, rising 1.3%
• Middle-income households face higher inflation (4.2%) than general population (2.8%)

DULUTH, Ga.--(BUSINESS WIRE)-- The latest Primerica Household Budget Index™ (HBI™), a monthly economic snapshot measuring the impact of inflation on middle-income households alongside their earned income, found the average purchasing power for necessities fell to 99.4% in February, a 0.3% decrease from a month ago but a 0.4% increase from a year ago. For households earning an annual income of around $60,000, the increase in necessity goods prices in February cost them about $110 more in total than in January. Uncertainty among middle-income households is being driven in part by the volatility in the cost of household necessities.

The latest Primerica Household Budget Index™ (HBI™), a monthly economic snapshot measuring the impact of inflation on middle-income households alongside their earned income, found the average purchasing power for necessities fell to 99.4% in February, a 0.3% decrease from a month ago but a 0.4% increase from a year ago. Purchasing power deteriorated in February as rising costs of auto insurance, gasoline and utilities continued to impact middle-income households’ budgets.

Purchasing power deteriorated in February as rising costs of auto insurance, gasoline and utilities continued to impact middle-income households’ budgets. Auto insurance continues to pressure middle-income families, rising 0.9% in February and more than 11% over the past 12 months. Gasoline prices, which had been falling, rose 1.3% over the month.

The Consumer Price Index (CPI) that measures inflation for a comprehensive basket of goods for all U.S. households came in at 2.8% in February. Adjusting the CPI to narrow the impact of inflation to focus specifically on middle-income households increases its impact to an estimated 3.6% year-over-year.

Further narrowing the CPI to assess the impact of inflation on the cost of middle-income household necessity items used in the HBI™ (food, utilities, gas, auto insurance, and health care) the estimated adjusted CPI measure shows an increase of 4.2% year-over-year. This highlights the disproportionate impact inflation has on middle-income families as reflected in the HBI™.

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, auto insurance, utilities, and health care and earned income to track differences in inflation and wage growth.

The HBI™ uses January 2019 as its baseline, with the value set to 100% at that point in time.

Periodically, prior HBI™ values may be modified due to revisions in the CPI series and Consumer Expenditure Survey releases by the U.S. Bureau of Labor Statistics (BLS). Beginning with the December 2024 release of the index, the expenditure weights have been updated to the most recent (Q1 2024) data and auto insurance has been added to the group of necessity items. 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 over 5.5 million lives and had approximately 3.0 million client investment accounts on December 31, 2024. 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”. For more information, visit www.primerica.com.

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Gana Ahn

678-431-9266

Email: Gana.Ahn@primerica.com

Source: Primerica, Inc.

FAQ

What is the current Primerica Household Budget Index (HBI) value and what does it indicate?

The HBI is at 99.4% in February, showing a 0.3% monthly decrease but 0.4% yearly increase, indicating slightly reduced purchasing power for middle-income households.

How much extra are middle-income households spending on necessities according to PRI's latest report?

Households earning around $60,000 annually spent approximately $110 more on necessities in February compared to January.

What is the current auto insurance cost trend according to Primerica's HBI report?

Auto insurance costs increased 0.9% in February and rose more than 11% over the past 12 months.

How does inflation impact middle-income households differently according to PRI's analysis?

While general CPI is 2.8%, middle-income households face 3.6% inflation, with necessity items experiencing 4.2% year-over-year increase, showing disproportionate impact.