Financial Conditions Worsen for Americans Amid Pandemic: Report

WASHINGTON:
Financial conditions have worsened dramatically for people who experienced a job loss or reduced hours in March as the COVID-19 pandemic swept across the US, according to a report released by the Federal Reserve Board.

In April, fewer adults reported that they were at least doing okay financially six months earlier, said the report on the Economic Well-Being of US Households on Thursday. A smaller supplemental survey showed that 43 per cent of adults were “doing okay” financially, and 29 per cent were “living comfortably”, down from 75 per cent and 36 per cent, respectively, in the fall of 2019, reports Xinhua news agency.

“The survey data show that early in the public health crisis, a larger fraction of Americans were facing financial hardship than in the fall of 2019,” said Federal Reserve Board Governor Michelle W. Bowman. The declines in self-reported financial well-being were concentrated on those who lost a job or had their work hours cut, the report showed.

Among adults not experiencing a job loss or reduction in hours, 76 per cent were at least okay financially in April. Among those who experienced a job loss or hours reduction, however, 51 per cent indicated that they were doing at least okay financially in April, whereas 48 per cent were “finding it difficult to get by” or “just getting by”.

Some 19 per cent of all adults reported either losing a job or experiencing a reduction in work hours in March, the report showed, while noting that some people took on new or additional employment in the month. Nine in 10 people who were furloughed or lost a job said that their employer indicated that they would return to their job at some point, according to the report.

However, in general, people were not told specifically when to expect to return to work. The report also showed that consistent with the employment declines in March, many people have experienced income declines. Twenty-three per cent of all adults, and 70 per cent of those who lost a job or had their hours reduced, said their income in March was lower than in February.

The survey was released a day after Federal Reserve Chairman Jerome Powell said the COVID-19 crisis raised “long-term concerns,” and warned that a prolonged recession and weak recovery could lead to an extended period of low productivity growth and stagnant incomes. Last week, the Bureau of Labor Statistics reported a staggering 20.5-million job loss in April, which erased a decade of job gains since the global financial crisis and pushed the unemployment rate to a record 14.7 per cent.