Gen Z is making less than millennials made a decennary ago at the same historic period .
As of the fourth quarter of 2023 , Gen Zs aged 22 to 24 were make an average of $ 45,493 . At that same age 10 years ago , adjusted for pretentiousness , millennials were seduce $ 51,825 , according to arecent study by TransUnion . And the debt - to - income ratio is 4 percentage points higher for Gen Z than millennials , arrive in at 16.05 % liken with 11.76 % , the cite authority found .
TransUnion attributes this to the fact that Gen Z , which is defined as the generation born between 1995 and 2012 , has come of old age duringa high ostentation economy , which has seen a 32 % cost increase in cumulative inflation since 2013 .
Photo: Getty Images (Getty Images)
Inflation top out in June 2022 , when the consumer Leontyne Price indexshot up 9.1%year - over - year , its fastest rate of increase in 41 years — just as a sizable portion of Gen Z began introduce the job market . And inflation has remained stubbornly high despite the Federal Reserve ’s quantitative tighten campaign , with consumer prices exclude food for thought and energy climbing at a 4.5 % annualized pace in the first quarter of 2024 — up from 3.3 % in the anterior quarter .
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And these pressures indicate in TransUnion ’s interviews with Gen Z : 14 % of Gen Z respondents said they were “ extremely punctuate out ” about their financial position , compared with 8 % of millennials a decade ago . That ’s almost the exact opposite of those who felt “ passing confident ” in their monetary resource , with 8 % of Gen Z saying so now and 13 % of millennials in 2013 .
Americans persist downbeat about the economy . The University of Michigan Survey of Consumers , a highly - watched power of consumer sentiment , dive 13 % in May — its lowest reading in six months and a sign that inflation is once again weighing on consumers .
Credit cards are a favorite for Gen Z
To fulfil some of these fiscal gap , the immature coevals is relying more on credit plug-in than their millennial opposite number at their eld , the report also found .
According to TransUnion,84 % of 22 - 24 twelvemonth oldshad at least one ecumenical - purpose credit card during the 4th quarter of 2023 , compare with just 61 % of 22 - 24 year olds in the same quarter a tenner earlier .
More than one - third of Gen Z respondents place credit cards as the most useful credit product , up from 29 % of millennials in 2013 .
“ It ’s no surprise that in this economic climate , one in which the cost of life is importantly higher relative to a decade ago , younger consumers are more and more turning to credit products to bridge their financial need , ” said Jason Laky , executive vice president and caput of financial services at TransUnion . “ This is a demographic that is younger and new to the workforce and consequently , is likely commanding a crushed salary at an former point in their career . As long as inflation remains elevated and the price of good remains so as well , balances across products such as course credit notice , personal loan , and car are likely to continue to uprise . ”
TransUnion in February surveyed 614 Gen Z consumer between the age of 22 and 24 , and 623 millennials , who were that age 10 years ago . Millennials are fix as those behave between 1980 and 1994 .
This clause originally appear onQuartz .
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