February HBI™ Reading Holds Steady at 101.4%
The most recent reading of the Primerica Household Budget Index™ (HBI™) reached 101.4% in February, matching the level recorded in January and marking a 1.8% increase compared with the same period one year earlier. This figure signals a continuation of relatively stable purchasing power for middle-income households as wage gains and inflation pressures continue to move in close alignment. The unchanged monthly reading highlights a period of equilibrium where income growth is largely offsetting rising costs for everyday necessities. Over the past year, modest improvement has been recorded, indicating gradual progress for households navigating a complex economic environment shaped by inflation, shifting consumption patterns, and cost pressures in essential categories. The index serves as a monthly gauge that tracks whether middle-income families are gaining or losing ground financially when paying for daily essentials, offering insight into how macroeconomic trends translate into real household budgets.
Rising Energy Costs Identified as a Key Risk Factor
Economic analysis accompanying the latest HBI™ release emphasized the importance of monitoring energy costs in the coming months. Higher energy prices historically ripple through household budgets in multiple ways, influencing transportation expenses, utility bills, and broader consumer prices. Analysts noted that small behavioral changes, proactive budgeting, and thoughtful use of savings can help households manage these pressures. Adjustments such as reducing discretionary energy consumption, planning transportation more carefully, and prioritizing emergency savings can mitigate the effect of rising costs. Strategic financial planning is highlighted as a practical tool for middle-income families to maintain stability as cost fluctuations continue across the broader economy. These shifts reinforce the importance of financial resilience and careful planning as essential tools for navigating a changing cost environment.
CPI Growth Provides Broader Inflation Context
The Consumer Price Index (CPI), which measures inflation across a broad basket of goods and services for U.S. households, rose 2.4% in February compared with the same month in the previous year. This annual increase reflects the broader inflationary environment affecting the national economy. While CPI offers a comprehensive overview of price changes across all income groups, the HBI™ narrows the focus to reflect spending patterns specific to middle-income households. The difference between the CPI and HBI™ methodology provides a more targeted perspective on how inflation affects families in the middle-income range. By isolating the spending categories that represent essential household costs, the HBI™ captures the financial reality experienced by families responsible for a significant share of consumer spending. The comparison between CPI and HBI™ data highlights the importance of examining inflation through multiple lenses to understand its full economic impact.
Inflation for Middle-Income Families Measured at 2.9%
When inflation is recalibrated to reflect the spending habits of middle-income households, the annual rate increases to 2.9% in February 2026 compared with February 2025. This adjusted inflation figure underscores how cost pressures can vary depending on income level and spending patterns. Middle-income families allocate a larger share of their budgets to essential goods and services, making them more sensitive to price changes in these categories. The adjusted rate therefore offers a more accurate picture of the financial pressures experienced by this demographic group. The difference between the overall CPI figure and the middle-income adjusted inflation rate illustrates how broad economic indicators may not fully capture the lived experience of households managing everyday expenses.
Cost of Necessities Rises 1.8% Year Over Year
The combined cost of essential items included in the HBI™—food, utilities, gasoline, auto insurance, and health care—rose 1.8% over the past year. These categories represent the core expenses that households must pay regardless of broader economic conditions. The annual increase reflects steady upward pressure on household budgets, even as income growth helps offset some of the impact. Tracking these categories individually and collectively offers a clear snapshot of how everyday living costs evolve over time. Since these expenses are largely unavoidable, changes in their cost significantly influence household financial stability. The relatively moderate increase suggests a period of controlled inflation in necessity categories, though ongoing monitoring remains essential.
Understanding the HBI™ Methodology
The Primerica Household Budget Index™ is developed monthly by a chief economic consultant and is designed specifically to measure the purchasing power of middle-income families. The index focuses on households earning between $30,000 and $130,000 annually, a group that represents a substantial portion of the population. By comparing earned income with the cost of essential goods and services, the HBI™ provides a real-time assessment of whether families are keeping pace with inflation. The methodology draws upon multiple reputable data sources, ensuring a comprehensive and reliable analysis of economic trends. This monthly approach allows analysts to observe short-term fluctuations as well as long-term patterns in purchasing power.
Data Sources Supporting the Index
The HBI™ relies on data from the U.S. Bureau of Labor Statistics, the U.S. Census Bureau, and the Federal Reserve Bank of Kansas City. These institutions provide authoritative datasets that capture inflation, wages, consumer spending, and broader economic indicators. By integrating these sources, the index delivers a robust view of how macroeconomic trends translate into household financial realities. Combining multiple datasets strengthens the credibility of the index and ensures that its findings reflect real-world conditions affecting middle-income families. The use of established government and research institutions as data providers reinforces the reliability of the HBI™ as an economic metric.
Filling a Critical Information Gap
The creation of the HBI™ addressed a gap in economic measurement by focusing specifically on middle-income households. Traditional metrics such as the CPI offer a broad overview of inflation but may not reflect the unique financial pressures faced by this group. Middle-income families often experience inflation differently due to the proportion of income allocated to essential expenses. The HBI™ was designed to provide a clearer view of how economic changes affect this demographic. By focusing on purchasing power rather than broad inflation alone, the index highlights whether families are gaining or losing financial ground in real time. This targeted approach adds valuable context to national economic discussions.
Middle-Income Households as Economic Drivers
Middle-income families play a crucial role in the U.S. economy, accounting for more than 55% of the population and representing a significant share of consumer spending. Their financial health directly influences economic growth, retail activity, and overall demand for goods and services. Because of their central role in driving economic activity, monitoring their purchasing power offers valuable insights into broader economic trends. When middle-income households experience increased financial pressure, the effects can ripple across multiple sectors. Conversely, when their purchasing power improves, it can stimulate economic growth through increased spending and investment.
Purchasing Power as a Real-Time Economic Indicator
Tracking purchasing power provides an immediate snapshot of economic conditions. When wages rise faster than the cost of essentials, purchasing power increases, signaling improved financial stability for households. When costs outpace income growth, purchasing power declines, indicating financial strain. The HBI™ captures this dynamic by comparing earned income with the cost of key necessities. This real-time measurement provides policymakers, economists, and consumers with a clear understanding of how economic conditions affect everyday life. The ability to monitor these changes monthly offers valuable insights into evolving trends.
Baseline Year and Historical Comparisons
The HBI™ uses January 2019 as its baseline, setting the index value at 100% for that point in time. Establishing a baseline allows analysts to track changes in purchasing power over time and compare current conditions with pre-pandemic economic levels. This historical perspective helps contextualize recent trends and highlights long-term shifts in the financial landscape. By measuring changes relative to a fixed starting point, the index provides a consistent framework for evaluating economic progress.
Periodic Revisions and Methodological Updates
Historical HBI™ values may be revised periodically to reflect updates in underlying data sources. Revisions to the CPI and Consumer Expenditure Survey released by the Bureau of Labor Statistics can lead to adjustments in previous index readings. These updates ensure that the index remains accurate and aligned with the latest available data. The commitment to periodic revisions reflects a dedication to maintaining the integrity and reliability of the metric.
Updated Expenditure Weights Implemented in 2024
Beginning with the December 2024 release, the index incorporated updated expenditure weights based on the most recent data available for the first quarter of 2024. Updating expenditure weights ensures that the index accurately reflects current spending patterns among middle-income households. Consumer behavior evolves over time, influenced by technological advancements, lifestyle changes, and shifting economic conditions. Revising the weighting methodology allows the index to remain relevant and representative of contemporary household spending habits.
Addition of Auto Insurance to Necessity Categories
A significant methodological update included the addition of auto insurance to the list of essential expenses tracked by the index. The inclusion recognizes the growing importance of auto insurance as a mandatory cost for many households. Rising insurance premiums have become an increasingly significant component of household budgets, making their inclusion critical for accurately measuring the cost of necessities. Expanding the list of tracked expenses enhances the index’s ability to capture real-world financial pressures.
Core Necessity Categories Tracked by the Index
The HBI™ focuses on five primary categories of essential spending: food, gasoline, utilities, auto insurance, and health care. These categories represent unavoidable expenses that households must manage regardless of economic conditions. Monitoring these costs provides a clear picture of how inflation affects daily living. Each category plays a distinct role in household budgets, and changes in any one of them can influence overall purchasing power.
Food Costs and Household Budgets
Food represents a foundational household expense, and even small price changes can significantly affect monthly budgets. Tracking food costs within the HBI™ ensures that the index reflects the real financial pressures experienced by families. Fluctuations in food prices can result from supply chain disruptions, weather events, and global market trends. Including this category highlights its importance as a core component of household spending.
Utility Expenses and Energy Consumption
Utility costs encompass electricity, heating, and other essential services that households rely on daily. Changes in energy prices can have a direct and immediate impact on household finances. Tracking utility expenses within the index provides insight into how shifts in energy markets affect families. Utility costs often vary seasonally, making their inclusion important for capturing month-to-month changes in expenses.
Gasoline Prices and Transportation Needs
Gasoline costs are closely tied to broader energy markets and can fluctuate significantly over short periods. Transportation remains a necessity for many households, particularly those commuting to work or managing family responsibilities. Including gasoline expenses ensures that the index reflects the financial realities of maintaining mobility. Changes in fuel prices often influence overall consumer spending and budgeting decisions.
Health Care Expenses and Financial Stability
Health care costs represent a significant and often unpredictable expense for households. Tracking these expenses provides insight into how medical costs affect financial stability. Rising health care costs can place pressure on household budgets, making their inclusion essential for measuring purchasing power accurately.
Strategic Financial Planning Emphasized
The HBI™ analysis highlights the importance of budgeting, savings, and financial planning as tools for managing changing economic conditions. Households that actively monitor spending and maintain emergency savings are better positioned to handle cost increases. Strategic planning enables families to adapt to evolving financial challenges while maintaining stability.
Role of Behavioral Adjustments in Managing Costs
Small behavioral adjustments can have a meaningful impact on household finances. Changes such as reducing unnecessary energy use, optimizing transportation habits, and prioritizing essential spending can help families manage rising costs. These practical strategies reinforce the importance of proactive financial management.
Continued Monitoring of Economic Trends
The HBI™ serves as a continuous monitoring tool that tracks the intersection of wages and inflation. Monthly updates provide a dynamic view of how economic conditions evolve over time. Regular analysis allows households, economists, and policymakers to stay informed about changes affecting financial stability.
Long-Term Importance of Purchasing Power Trends
Long-term trends in purchasing power provide valuable insights into economic progress and financial well-being. Monitoring these trends helps identify patterns that may influence future economic policy and household decision-making. The HBI™ contributes to this understanding by offering a focused view of middle-income financial health.
About Primerica, Inc.
Primerica, Inc., headquartered in Duluth, GA, is a leading provider of financial products and services to middle-income households in North America. Independent licensed representatives educate Primerica clients about how to better prepare for a more secure financial future by assessing their needs and providing appropriate solutions through term life insurance, which we underwrite, and mutual funds, annuities, managed investments and other financial products, which we distribute primarily on behalf of third parties. We insured over 5.5 million lives and had approximately 3.1 million client investment accounts as of December 31, 2025. Primerica, through its insurance company subsidiaries, was the #3 issuer of Term Life insurance coverage in the United States and Canada in 2025. Primerica stock is included in the S&P MidCap 400 and the Russell 1000 stock indices and is traded on The New York Stock Exchange under the symbol “PRI”.
