Almost 90 Million American Adults Struggle to Make Ends Meet, Census Says (From Bloomberg) [3 Articles]
~ Saturday, June 17, 2023 Blog Post ~
- About 38.5% of households face difficulty in survey period
- More households turn to credit cards to cover spending needs
More Americans struggle to meet expenses now than in the immediate aftermath of the Covid-19 pandemic, when millions lost their means of employment, a Census Bureau survey showed.
About 38.5% of American adults — or 89.1 million people — faced difficulty in paying for usual home expenses between April 26 and May 8, according to the latest Household Pulse Survey. That’s up from 34.4% a year ago and 26.7% during the same period in 2021.
The Census Bureau collaborates with multiple federal agencies to compile the survey developed during the pandemic to collect data and measure household experiences to help inform federal and state governments.
Sources:
https://twitter.com/wealth/status/1660816072486932480/
https://www.youtube.com/watch?v=w0fbXe8CE7w
Article #2: More Americans say they can’t pay their bills. Here are the states where it’s worst. (From CBS News)
By Aimee Picchi, March 17, 2023, Moneywatch
Prices were up in February, new data shows
A growing number of Americans say they are struggling to pay their bills, battered by inflation and the loss of federal pandemic aid.
About 36% of consumers say it has been “somewhat” to “very difficult” for them to pay their usual bills in the last seven days, according to the Census Bureau’s most recent Household Pulse survey, which gathered responses during the first two weeks of February. That represents a 25% increase compared with a year earlier, and is higher than even in the early months of the pandemic, when households were buoyed by expanded unemployment aid and stimulus checks.
The health of the American consumer is key to the U.S. economy, which relies on consumer spending for 70 cents of every $1 in economic activity. Increasingly, however, there are signs that more households are reaching a breaking point, weighed down by grocery prices that have jumped 20% in two years and rents that have surged 13%.
Consumers are cutting back by trading down to cheaper store brands and even buying less food, said Neil Saunders, managing director of GlobalData, in a research note citing his company’s survey of about 2,800 Americans.
“[I]nflation is not an enemy that consumers can withstand indefinitely,” he noted.
Negative earnings
At the same time, there’s a dichotomy in the economy: The job market remains strong, with employers continuing to hire. Yet while more Americans may have jobs than in the early days of the pandemic, their incomes aren’t keeping up with inflation — eroding their standard of living, experts point out.
“Real earnings have been negative every month since April 2021,” noted Evan Lorenz, deputy editor of Grant’s Interest Rate Observer. “The money they are bringing home each week goes a little less far.”
Some Americans are struggling more than others, with a greater share of hardship reported in many Southern states, the census data shows. Incomes tend to be lower in those regions, with many workers still earning the federal minimum wage of $7.25 an hour — an hourly rate that hasn’t budged since 2009.
Mississippi has the greatest share of Americans who are straining to pay their bills — more than half of its residents report difficulty in meeting their typical obligations, the census data shows. Other states with a greater than average share of struggling households include Alabama, Louisiana and West Virginia.
Median household income in Mississippi stands at $46,637, well below the U.S. average of $70,784, according to the Federal Reserve Bank of St. Louis. Meanwhile, Minnesota, the state with the smallest share of residents who are experiencing difficulty in paying their bills, has a median household income of $80,441.
The share of Americans who are living paycheck to paycheck is on the rise, according to a study published last month by LendingTree. The analysis found that 61% of consumers were living paycheck to paycheck in December, a seven percentage point rise from May 2021.
“I am overwhelmed”
Not surprisingly, Americans earning less than $25,000 are struggling the most, with about 64% saying they recently experienced difficulties in paying their recent bills, the census report found. And people who receive food stamps, who typically live in low-income households, are reporting a spike in financial distress, according to Stacy Taylor, head of policy and partnerships at Propel, which makes an app for food-stamp recipients to check their balances.
Food-stamp recipients are reporting issues like, “‘My credit cards are maxed out, I’m not finding the work I need, my rent is overdue and I’m hitting the breaking point’,” Taylor said of the company’s February survey of its users.
She added, “We just hear, ‘I am overwhelmed’.”
Even some higher-income Americans say they are running into problems. Almost 1 in 10 people who earn over $200,000 a year said they experienced some or a lot of difficulty in paying the bills, according to the census data.
To be sure, that reflects a far smaller share than lower-income Americans who say they are strapped, but it could indicate that even wealthier households are straining to maintain their standard of living with recent economic trends. New cars, for instance, are 19% more expensive than two years ago, and a record share of Americans are paying monthly auto payments of more than $1,000.
“The cost of living in America — you need a roof over our head and car to get to your job — is rising much faster than your income,” Lorenz said.
Source and references:
https://www.theguardian.com/us-news/2022/nov/05/multiple-jobs-census-data-inflation-us
Article #3: More Americans are struggling to make ends meet NOW than in the aftermath of the pandemic — new survey shows nearly 40% of US households can’t pay expenses (From Daily Mail)
By Alex Hammer, May 18, 2023
- The Census Bureau data, released Wednesday, shows 38.5 percent of adults — or 89.1million people — found it difficult to pay their bills between April 26 and May 8
- It is up from a year ago, when 34.4 percent of adults reported budget crunches
Roughly two in five Americans are still struggling to make ends meet, new federal data has shown — more than the amount seen in the aftermath of the Covid-19 pandemic.
The revelation comes from the Census Bureau’s latest household survey, released Wednesday, which shows some 38.5 percent of adults — or 89.1 million people — experienced difficulty paying their bills between April 26 and May 8.
The number is up from a year ago, when 34.4 percent of Americans reported they were undergoing budget crunches and comes as a near-50 percent increase from the 26.7 percent recorded in 2021.
Officials found the data thanks to an experimental online survey representative of the overall adult population, and through a collaboration with several other federal entities. Developed during the pandemic, the tool also allows the exploration of data at the national, state and metro area levels.
It found more than half of 50 states are actually above the 40 percent marker, and more Americans than ever are relying on credit cards to get by — 38 months after the first US COVID case, and years after the lockdowns that saw millions lose their jobs.
‘The Household Pulse Survey is a 20-minute online survey studying how the coronavirus pandemic and other emergent issues are impacting households across the country from a social and economic perspective,’ Bureau officials wrote.
‘[It] continues asking about core demographic household characteristics (including sexual orientation and gender identity), as well as asking questions about… childcare arrangements and cost… food sufficiency… [and] household spending.’
Those questions began at the survey’s inception in August of 2020, when 31.9 percent of Americans revealed they were struggling to meet at least one of their families’ basic needs, including housing, groceries and paying utility bills.
Over the next six months, that number would swell to more than 37 percent, followed by a pronounced drop back to levels that presumably would have been reported prior to the pandemic.
Enjoyed for most of 2021 — the first year of Joe Biden’s presidency — the percentage has since risen dramatically, thanks, in part, to rapidly rising rates of inflation.
As the spending power of the US dollar declined, more Americans reported financial difficulties — especially in states with lower median incomes.
By the end of 2021, the percentage of US adults encountering financial uncertainty was back at 30 percent, according to the survey — a number recorded less than three months before the Federal Reserve would execute its first interest rate hike in more than three years to address the dollar’s diminishing state.
Within a half a year, and less than two months after a second consecutive rate increase, the number rose to 40 percent, the data shows — a marker it would go on to hover around until November, when it fell to 39.5 percent.
However, it returned to 40 percent the following month, and per the data gleaned during the survey’s latest research period, has since only fallen to the aforementioned 38.7 percent.
It shows that while the pandemic for the most part has passed, and despite unemployment rates being back to pre-pandemic lows, the US economy could still be seen to be in dire straits — even after 10 consecutive rate hikes from the Fed.
It reveals that virtually the same number of Americans — and markedly more than the amount seen in the first year of the pandemic — can barely cover day-to-day costs that also include transportation, health insurance, and access to infant formula.
The phenomenon could be attributed to a confluence of causes, such as rising grocery costs seen over the past two years — as well as rent increases that have risen disproportionately when compared to salaries seen in their respective states.
Also potentially playing part is a recent national shortage of baby formula, though it has been more than a year since major manufacturer Abbott sparked the crisis by recalling several products.
By most measures, the shortage has since been resolved — with recent market research data showing that formula’s availability has been back to pre-shortage levels for more than half a year.
However, survey data also garnered by the Census Bureau showed that may not be the case, and that many families are still struggling — after many were forced to shell out astronomical amounts of cash for gas to find a store selling the all-important liquid.
That said, the share of struggling households varies widely by geography — with states sporting low average salaries such as Mississippi and Louisiana facing some of the biggest budget problems, according to the Bureau’s latest survey.
Other states sporting the worst rates of financial livability included Texas, Georgia, and Alabama, with several other offenders such as New Mexico and Arizona.
Those locales, as well as other low-salaried states such Kentucky and West Virginia, sported percentages higher than 41.3 percent.
Surprisingly, two western states also made that cut, despite possessing higher median incomes than their contemporaries,
California and Nevada, both brought down by underperforming metro areas, such as Los Angeles and Las Vegas, saw nearly half of all households struggling.
The City of Angels, which boasts an average salary of about $70,000, was recently declared the fourth most expensive city to live in in the entire world, according to authoritative ranking compiled by the Economist Intelligence Unit.
Recently, the locale was declared to have the seventh highest-average rent in the entire country by real estate tracker Zumper, as it, like several other cities across the country, have reported massive year-over-year increases since the pandemic.
In another startling phenomenon laid bare by the Bureau, to combat these budget crunches, more and more households are turning to credit cards.
According to the survey, more than 25 million households say that they used credit cards or took a loan out to stay afloat before their next check — up from 22.4 million a year earlier.
The number is the highest seen since the survey’s creation, and could spell trouble as inflation rates remain persistently high.
That stubbornness has caused a split the Fed’s subsequent path on how to manage its interest rates in coming months.
Its most aggressive series of increases since the 1980s, the government agency has already raised its key rate by a substantial 5 percentage points in the past 14 months.
Those hikes have caused mortgage rates to more than double over the past year, while also elevating the costs of auto loans, credit card borrowing and business loans.
Home sales, moreover, have also plunged — further proof that Americans are still struggling more than ever.
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