Americans Are Feeling The Financial Squeeze, And 3 Charts Show Why

The S&P 500 (^GSPC) trading near a record high doesn't mean all is fine and dandy in the US economy. Quite the contrary for many households as they battle higher costs for gas, fuel, and medical insurance this year.

Consumer sentiment fell to 46.3 in October, down 1.8 points from September's reading of 48.1, according to the latest from the University of Michigan. The result represented a five-month low.

Pressured household finances have appeared in the crop of third quarter earnings reports from packaged food companies. Food and beverage giant PepsiCo (PEP) slashed its full-year profit outlook last week. That came on the heels of spice-maker McCormick (MKC) reporting sluggish demand in its most recent quarter.

"We don't expect the consumer to suddenly become in a much better place in the next 12 to 18 months," PepsiCo CEO Ramon Laguarta said on the company's earnings call.

Here are several charts from the Goldman Sachs team that shed light on the realities facing many US households, and why a lot of consumer companies are struggling.

Household debt is on the rise

With the cost of living remaining high, households are taking on more debt to get by. Household debt now tops $18 trillion.

Personal savings are dwindling

In addition to taking on more debt, households have dipped into their savings to spend on what they need to spend on. Personal savings rates are below the long-term average.

Read more: How to protect your savings against inflation

Goldman Sachs

Stagnant wages

Inflation has eaten up worker wages. In September, average hourly earnings rose just 0.1% month over month and 3% year over year, according to Labor Department data. Government data found that, in August, inflation increased 3.4% year over year.

Goldman Sachs

Brian Sozzi is Yahoo Finance's Executive Editor, host of the Sozzi Unleashed morning show, the 'Power Players With Brian Sozzi' podcast and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.

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