The middle class is squeezed. Not in some abstract, theoretical way—but in the daily arithmetic of rent checks, grocery bills, and credit card statements. If you’re working full-time and still feel like you’re falling behind, you’re not imagining it. The data backs up what millions of Americans already know: the economy isn’t working for them anymore. Here are four concrete signs that the U.S. economy feels unhealthy for middle-class families—and the official government data that proves it.
Your Paycheck Isn’t Keeping Up with Prices
You got a raise this year. Maybe 3%, maybe 4%. Felt good for about a week. Then you filled up your gas tank, bought groceries, and paid the electric bill. Suddenly that raise vanished. This is the reality of real earnings—what your paycheck actually buys after inflation eats into it. And the numbers are brutal. According to the Bureau of Labor Statistics’ Real Earnings report, real average hourly earnings decreased 0.1% from July to August 2025. Translation: even though workers got a 0.3% bump in nominal pay, the 0.4% rise in the Consumer Price Index wiped it out—and then some.
Over the past year (August 2024 to August 2025), real hourly earnings rose just 0.7%. That’s not nothing, but it’s barely keeping pace with the cost of living. For production and nonsupervisory employees—the bulk of the middle class—real hourly earnings increased 1.1% year-over-year. Better, but still modest when you consider how much prices have climbed since 2020. When that “Real Earnings” line on the BLS chart stalls or dips, families feel it immediately. Raises get swallowed whole by rent hikes, grocery inflation, and utility increases. Your income might look fine on paper, but your purchasing power—what that income can actually buy—is flat or falling.
If your paycheck feels like it’s running in place, that’s because it is.
Serious Credit Card Delinquencies (unpaid balances for at least 90 days) are at their highest level in 14 years 🚨🚨🚨 pic.twitter.com/hl1Fhzz1Af
— Barchart (@Barchart) November 14, 2025
History shows us that having too much debt during an economic downturn leads to a classic, self-reinforcing cycle where:
— Ray Dalio (@RayDalio) November 6, 2025
1) The empire can no longer borrow the money to repay its debts
2) It prints a lot of new money, which devalues the currency and raises inflation
3) Living…
Credit Cards Become a Crutch, and Interest Is Punishing
There’s a moment when credit cards stop being a convenience and start becoming a lifeline. When you’re not charging because you want to—you’re charging because you have to. Groceries. Car repairs. Medical bills. The gap between what you earn and what you need gets filled with plastic.And right now, that plastic is expensive. The Federal Reserve’s G.19 Consumer Credit report shows that credit card interest rates hit 21.39% as of September 2025. That’s up from 14.71% in 2020. Let that sink in: if you carry a $5,000 balance at 21.39% APR and make only minimum payments, you’ll pay over $1,000 in interest annually—just to stay afloat.
Revolving credit (mostly credit cards) increased at a 2.0% annual rate in Q3 2025. That might sound modest, but it comes on top of years of steady growth. More people are carrying balances month to month, and those balances are getting more expensive to service.
This is a classic stress signal. When middle-class families start leaning on high-interest debt to cover everyday expenses, it’s not a sign of irresponsibility—it’s a sign the economy isn’t delivering enough income to cover basic costs.
The Fed tracks these trends closely because they know what it means: everyday debt is getting heavier, and families are one emergency away from serious financial trouble.
Delinquencies Creep Up
Missing a payment used to be rare. Something that happened to “other people.” Now? It’s happening to your neighbors, your coworkers, maybe even you. The New York Fed’s Household Debt and Credit report tracks delinquency rates across credit cards, auto loans, student loans, and mortgages. When those missed-payment rates start climbing, it’s a red flag that middle-income households are under strain.
And they are climbing.
Delinquencies don’t spike overnight. They creep up slowly—a missed credit card payment here, a late auto loan there. But the trend is unmistakable. More Americans are falling behind on their obligations, not because they’re reckless, but because the math just doesn’t work anymore. When your paycheck isn’t keeping up with prices (see section A), and you’re leaning on expensive credit to fill the gap (see section B), eventually something has to give. That “something” is often a missed payment.
The New York Fed’s data shows this stress building in real time. Rising delinquencies are a lagging indicator—they tell you the squeeze has already been happening for months. By the time families start missing payments, they’ve already exhausted their savings, maxed out their credit, and run out of options.
This isn’t a moral failing. It’s an economic one.
Homeownership Drifts Out of Reach
Owning a home used to be the cornerstone of middle-class life. Work hard, save up, buy a house, build equity. That was the deal.
That deal is broken. The Atlanta Fed’s Home Ownership Affordability Monitor (HOAM) tracks how much of your income it takes to afford a median-priced home. The standard benchmark: if homeownership costs exceed 30% of your annual income, the home is considered unaffordable.
Right now, for most middle-class families, homeownership is deeply unaffordable.
The HOAM dashboard shows that the share of median income needed to buy a median home has jumped to extremes—and stayed there. Mortgage rates, home prices, and property insurance have all climbed faster than wages. The result? The typical family simply can’t afford the typical house.
The Atlanta Fed’s Affordability Index makes this crystal clear: when the index falls below 100, homes are unaffordable. And for much of the country, that index has been underwater for years. Even if you have a solid job, good credit, and some savings, the math doesn’t work. Down payments are out of reach. Monthly payments eat up too much of your income. Property taxes and insurance keep climbing. And unlike previous generations, today’s middle class can’t just “wait it out”—prices aren’t coming down, and wages aren’t catching up fast enough.
Homeownership isn’t just harder than it used to be. For many, it’s simply out of reach.
The Bottom Line
These aren’t abstract economic indicators. They’re the lived reality of millions of middle-class Americans. Your paycheck isn’t keeping up with prices. Credit cards are becoming a crutch, and the interest is punishing. Delinquencies are creeping up as families fall behind. And homeownership—the traditional path to wealth and stability—has drifted out of reach.
The data from the Bureau of Labor Statistics, the Federal Reserve, the New York Fed, and the Atlanta Fed all tell the same story: the middle class is under strain. This isn’t about blame. It’s about recognition. The economy might look healthy on paper—low unemployment, rising GDP—but for the middle class, it feels anything but. And until wages catch up with costs, credit becomes affordable again, and housing returns to reach, that squeeze will only get tighter.
The numbers don’t lie. And neither do the families living them.
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