Rising Utility Debt Signals Economic Strain for US Households

A recent analysis reveals that a growing number of American households are struggling to pay their utility bills, highlighting potential economic challenges ahead. The study, conducted by The Century Foundation, indicates that overdue balances for utility services surged by 9.7% in the past year, reaching an average of $789 during the April to June 2025 period. This increase coincides with a significant rise in monthly energy costs, which have jumped by 12% in the same timeframe.

The data underscores a concerning trend as consumers typically prioritize utility payments alongside their mortgages and auto loans. Julie Margetta Morgan, president of The Century Foundation, pointed out that the escalating energy costs may be forcing families to fall behind on other financial obligations as well. “There’s a lot of information out there about rising utility costs, but here we can actually look at what that impact has been on families in terms of how they’re falling behind,” she stated.

Economic pressures are presenting a dilemma for President Donald Trump, who is advocating for the expansion of the artificial intelligence sector as part of a broader economic strategy. The energy demands of AI data centers could exacerbate electricity costs for everyday Americans. Voter dissatisfaction over rising living expenses poses additional challenges for Trump’s administration, particularly in light of recent off-year elections where affordability emerged as the primary concern for constituents.

As the midterm elections approach, the issue of surging utility bills may become a significant factor in key congressional races. While Trump has focused on decreasing gasoline prices, which constitute about 3% of the consumer price index, the impact of rising electricity and natural gas bills cannot be overlooked. The president has publicly disputed claims regarding inflation, asserting on social media, “In fact, costs under the TRUMP ADMINISTRATION are tumbling down.”

The analysis also reveals that nearly 6 million households possess utility debt so severe that it may soon be referred to collection agencies. This marks a 3.8% increase in households facing overdue utility payments during the first half of Trump’s presidency. Advocacy groups have expressed frustration over the rising costs, with Mike Pierce, executive director of Protect Borrowers, commenting on the detrimental effects of political decisions on family finances.

Both Morgan and Pierce have backgrounds at the Consumer Financial Protection Bureau, which was established to monitor trends in household borrowing. Their insights indicate that the Trump administration’s policies may inadvertently contribute to higher utility costs by hindering the growth of renewable energy sources, such as solar and wind power.

In response to concerns about rising utility prices, Treasury Secretary Scott Bessent stated that these costs are largely regulated at the state level and emphasized that the federal government has limited control over local electricity rates. He noted, “Electricity prices are a state problem,” while asserting that they are higher in states governed by Democratic leadership.

Despite these alarming trends in utility debt, other economic assessments suggest that consumer finances remain relatively stable. The New York Federal Reserve reported increases in delinquency rates for mortgages, auto loans, and student debt over the past year, although it classified mortgage delinquencies as “relatively low.” Meanwhile, an analysis by the Bank of America Institute indicated that consumer financial health appears sound overall.

As the landscape continues to evolve, the implications of rising utility costs for American households and their potential impact on the broader economy remain critical issues for policymakers and voters alike.