Paychecks aren't keeping up with inflation
The cost of living is rising faster than most family incomes.
The Consumer Price Index was 5.6% higher in July 2008 than in July 2007. We haven't seen inflation like that since the early 1990s.
The inflation-adjusted income for workers in production or nonsupervisory jobs was down 3.1% in July.
The Labor Department says it was the 10th month in a row that average incomes failed to keep pace with inflation.
"Any way you slice it, incomes aren't keeping up with the inflation rate," Michael Darda, chief economist at the trading and research firm MKM Partners, told the New York Times.
"People see it and they feel it on a daily basis," Darda said. "If it's gasoline or food, that's visible inflation, and the stuff that households need the most and depend on."
Many families caught in that squeeze are having an increasingly difficult time borrowing the money they need to sustain their standard of living.
With property values falling in three out of every four cities lenders have frozen hundreds of thousands of home equity lines of credit, making it impossible for families to take any more cash from their homes.
They've also reduced the spending limit on many credit cards.
Almost a third of banks said they tightened lending standards on credit cards between January and April, according to the Federal Reserve's latest senior loan officer survey.
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