According to the Gallup poll on household finances the number of households that are not able to make ends meet increased rapidly last year and in the last couple of months. The proportion of households that cannot make ends meet has tripled from the beginning of 2021 until January – February 2023, or from 6% to 18%. This is a large increase in a short period of time.
The decreasing purchasing power from April last year, due to more inflation and the central banks´ sharp increases of the interest rate, is thus becoming more evident. The wage increases that were negotiated last December do not seem og have been sufficient to hold back the worsening household finances in the last couple of weeks. This can be seen in picture 1, with a comparison of the status in April 2022 and in January-February 2023.
Picture 1: The proportion of households that are not able to make ends meet, in the years 2021 to 2023. Source: Gallup.
Picture 2: Financial difficulties: All households and a few special groups 2023. Source: Gallup.
On picture 2 it can be seen that people in the lower wage groups and renters are the ones which now have the hardest time making ends meet, but homeowners are on the whole in a better position. Young families are in a worse position then the average of all families.
The lowest income households and renters are therefore the ones who feel the worst effects of the inflation and the situation in the housing market, according to the newest Gallup poll.