New federal data reveals that roughly 40% of Americans are facing financial difficulties, surpassing the levels seen in the aftermath of the Covid-19 pandemic. The Census Bureau’s latest household survey, conducted through an experimental online tool, shows that 89.1 million people, or 38.5% of adults, had difficulty paying their bills between late April and early May. This is an increase from the previous year’s 34.4% and a significant jump from the 26.7% recorded in 2021.
The survey allows for the exploration of data at the national, state, and metro area levels. It shows that over half of the 50 states have rates above 40%. Additionally, more Americans are relying on credit cards for their everyday expenses, even 38 months after the first US Covid case.
The survey, known as the Household Pulse Survey, is a comprehensive study of how the coronavirus pandemic and other emerging issues are impacting households in the US. It covers areas such as housing, groceries, utility bills, childcare, and household spending.
Since the survey’s inception in August 2020, the percentage of Americans struggling to meet their basic needs has fluctuated. It initially rose to over 37% and then dropped back to pre-pandemic levels. However, it has since risen dramatically, especially due to rising inflation rates. The declining value of the US dollar has made it more challenging for Americans, particularly those in states with lower median incomes, to manage their finances.
The survey also highlights the increasing reliance on credit cards as households struggle to make ends meet. Americans are turning to credit cards and loans to cover expenses until their next paycheck. The number of households using credit cards or loans has reached its highest level since the survey’s inception.
The survey further identifies geographic variations in financial struggles. States with lower average salaries, such as Mississippi, Louisiana, Texas, Georgia, and Alabama, are among the states with the highest rates of financial difficulties. Even states with higher median incomes, like California and Nevada, are affected, mainly due to underperforming metro areas such as Los Angeles and Las Vegas.
The rising cost of living, including increased grocery prices and disproportionately high rent, contributes to the financial challenges faced by households. Inflation rates have remained high, despite the Federal Reserve implementing consecutive interest rate hikes. This has led to higher mortgage rates, increased costs of loans and borrowing, and a decline in home sales.
Overall, the survey depicts a concerning landscape for many Americans, with a significant portion struggling to cover basic expenses. The reliance on credit cards and the persistence of financial difficulties despite the post-pandemic recovery pose ongoing challenges for individuals and the US economy as a whole.
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