On one level, the U.S. economy looks healthy: Jobs, wage growth, consumer spending and inflation under President Donald Trump look stable. In addition, the stock market is near a record high.
Yet consumer, according to CNN, confidence is near record lows and recent polling shows Trump’s economy gets dreadful grades from potential voters – a political liability for Republicans ahead of this year’s midterms. The Economist reports that consumer confidence in America dropped to its lowest level since 2014 in January.
Housing and child care in particular are largely unavailable and unaffordable. And loan delinquencies, especially for lower-income families, are starting to get worrisome.
It also stands that in every state consumer purchasing power has fallen. No state in the U.S. has experienced a purchasing power growth, and even regions with 9-10% wage growth are facing a net loss in 2026. Within the overall fall, some states have fared worse than others.
According to a March 2026 report on purchasing power across the U.S., in Florida, workers are hit the hardest by rising expenses. This is as per a study by fintech company SensaPay which looked at actual cost pressures rather than relying on headline CPI (Consumer Price Index) and calculated the “real” index reflecting purchasing power loss.
This reveals that people in Florida have lost 10.3% of their spending power, as the cost of living grows much faster than their actual paychecks. In addition, the highest national gap between paychecks and the cost of living was reached in Utah, with locals effectively losing $9,702 yearly.
The report looked at the difference between how much people are earning and what they actually spend on essentials across all 50 states. Researchers estimated 2026 salaries based on recent state and national wage growth data from the Bureau of Labor Statistics. The study then compared wage growth to a custom index that tracks the real price jumps for rent, home insurance, and utility bills. The final comparison identifies the ‘Effective Pay Cut,’ showing exactly how much inflation is outrunning local paychecks.
Florida suffers most
Florida is the hardest state for workers to keep up with rising prices, as they experience 10.3% loss of purchasing power each year. While salaries in the state have grown by 8.7% since 2023, this hasn’t been enough to protect residents from a massive 19% spike in the cost of living. Because expenses for things like insurance and housing are climbing so rapidly, the average worker is effectively living on $8.2K less than they were just a few years ago.
The other four poor perfomers
Utah comes in second with a 9.7% gap between what people earn and what they pay to live. Average annual incomes in the state are expected to hit $100.2K by 2026, a 7.3% rise. At the same time, basic expenses are growing in price by 17%, and each salary buys almost $10K less than three years ago.
Colorado ranks third among the states where inflation is hitting the hardest. The state shows a similar trend to Utah, where the value of a $100.6K salary is dropping as local expenses have a price hike of 18%. Even though wages grew strongly (8.4%), the price growth for utilities and rent has created a 9.6% effective pay cut. This leaves Colorado employees with a $9.6K hole in their annual budget.
Texas takes the fourth spot, showing that even in the states with lower costs, residents are experiencing financial pressure. The salaries grew at a steady 7.5% in the last 3 years, similar to Utah, but it cannot compare with 16% inflation from monthly bills and auto insurance. This results in an 8.5% loss in purchasing power, and Texan incomes feel $6.9K smaller, a sizable bite from the average $81.4K salary.
New Jersey rounds out the top five with an 8.4% pay cut for its workforce. While the state has one of the highest estimated salaries in the study at $107.4K, it also faces a 16% rise in the price of essential services. When comparing the 7.6% wage growth to these rising costs, the average resident is losing $8,983 in real value every year.
