Read our full analysis for a more in-depth look at these trends.
Inside the cost-of-living squeeze
Households are weathering higher prices, but housing costs remain a key strain.
November 2026
Key takeaways
- Not every essential has become less affordable. Despite the cumulative rise in prices, households are spending a slightly smaller share of income on gas and groceries than they did several years ago. That suggests the affordability squeeze is less broadbased than the inflation headlines alone might imply.
- Housing is the major exception, and the pressure extends beyond lower-income households. Both mortgages and rent have increased since 2019. Some lower-income renters look particularly stretched, but around one in four higher-income mortgage holders also spend more than half their income on housing.
- Wage gains and changing behavior have helped households absorb higher prices. But real wage growth has mostly softened, which may help explain why sentiment remains weak even as consumer spending continues to grow. In fact, declining sentiment likely reflects the sacrifices consumers have to make in order to keep spending.
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