A growing number of Americans say they are having trouble paying their bills. hit by inflation and the loss of federal pandemic aid.
According to the latest Census Bureau data, about 36% of consumers said they had “somewhat” or “extremely” difficulty paying their regular bills in the past seven days. household pulse survey, collected responses in the first two weeks of February. That’s a 25% year-on-year increase, higher than in the early months of the pandemic, when households were supported by expanded unemployment assistance and stimulus measures.
The health of American consumers is important to the American economy, which depends on consumer spending for 70 cents on every dollar of economic activity. But there are signs that more and more households are hitting a breaking point, with food prices jumping 20% and rents jumping 13% in his two years.
Neil Sanders, managing director of Global Data, said in a research note citing the company’s survey of about 2,800 Americans, that consumers are switching to cheaper store brands or buying less food. You save money by doing
“[I]”Inflation is not an enemy that consumers can endure indefinitely.”
At the same time, there is a dichotomy in the economy. The job market remains strong and employers continue to hire. But while more Americans may have jobs than earlier in the pandemic, their incomes haven’t kept up with inflation, and their living standards have fallen, experts say.
Evan Lorenz, deputy editor of Grant’s Interest Rate Observer, said, “Since April 2021, real earnings have been negative every month. “They’re taking a little less money home each week.”
Census data shows that some Americans are suffering more than others, with many states in the South reporting more hardship. Income tends to be lower in these areas, with many workers still earning the federal minimum wage of $7.25 an hour, which he has not fluctuated since 2009.
Mississippi has the highest percentage of Americans struggling to pay their bills, with more than half of its residents reporting difficulty meeting their regular obligations, according to census data. Other states with above-average percentages of struggling households include Alabama, Louisiana, and West Virginia.
Mississippi’s median household income is $46,637, well below the US average of $70,784. according to To the Federal Reserve Bank of St. Louis. Meanwhile, the median household income in Minnesota, which has the lowest percentage of residents struggling to pay bills, is $80,441.
“I am overwhelmed”
Not surprisingly, Americans with incomes below $25,000 are having the hardest time, with about 64% saying they had trouble paying their most recent bill, the Census report found. And people who receive food stamps, who typically live in low-income households, are reporting a spike in financial hardships, according to his Propel policy and partnership to create an app for food stamp recipients to check their balances. said Stacy Taylor, director of .
Food stamp recipients are “reporting problems like ‘credit cards are depleted, they can’t find the job they need, they’re behind on rent and they’ve hit a breaking point,'” Taylor said. He spoke of the company’s February survey. of that user.
She added, “I just hear, ‘I’m overwhelmed.'”
Even some high-income Americans say they face problems. According to Census data, nearly 1 in 10 people whose annual income exceeds her $200,000 said they experienced some or significant difficulty paying their bills.
Admittedly, it reflects a much smaller percentage than low-income Americans who say they’re in trouble, but even wealthy households are keeping their living standards in line with recent economic trends. For example, new cars are 19% more expensive than they were two years ago, and a record percentage of Americans are paying their monthly car insurance premiums. increase. $1,000 or more.
“The cost of living in America is rising much faster than income, with a roof over your head and a car to get to work,” Lorenz said.