About two in five Americans are still struggling to make ends meet, new federal data shows — more than they were after the Covid-19 pandemic.
The revelation comes from the Census Bureau’s latest household survey, released Wednesday, which shows that between April 26 and May 8, around 38.5 percent of adults — or 89.1 million people — had difficulty to pay their bills.
The number is up from last year, when 34.4 percent of Americans said they were experiencing budgetary constraints, up nearly 50 percent from 26.7 percent in 2021.
Officials found the data thanks to an experimental online survey representative of the entire adult population and through collaboration with several other federal agencies. Developed during the pandemic, the tool also allows for the exploration of data at the national, state and metro level.
It found that more than half of the 50 states are actually above the 40 percent mark and more Americans than ever are relying on credit cards to make ends meet – 38 months after the first COVID case in the US and years after the lockdowns that caused millions to lose their jobs.
About two in five Americans are still struggling to make ends meet, new federal data shows — more than they were after the Covid-19 pandemic
Developed during the pandemic, the tool also allows for the examination of data at the national, state and metro level – and reveals that residents of much of the South and states like California are struggling to afford basic necessities like childcare and groceries
“The Household Pulse Survey is a 20-minute online survey that examines how the coronavirus pandemic and other emerging issues are impacting households across the country from a social and economic perspective,” officials with the bureau wrote.
‘[It] continues to ask about a household’s key demographics (including sexual orientation and gender identity) and asks questions about… childcare arrangements and costs… adequate food… [and] household expenses.’
These questions began when the survey began in August 2020, when 31.9 percent of Americans said they were struggling to meet their basic needs, or at least one of their families’, including housing, groceries and paying utility bills.
Over the next six months, that number would surge to over 37 percent, followed by a significant drop to levels that would likely have been reported before the pandemic.
The percentage enjoyed most of 2021 — the first year of Joe Biden’s presidency — has increased dramatically since then, due in part to rapidly rising inflation rates.
As the purchasing power of the US dollar declined, more and more Americans reported financial difficulties, particularly in lower-income countries.
By the end of 2021, the percentage of U.S. adults facing financial uncertainty was back at 30 percent, according to the survey — a figure less than three months before the Federal Reserve’s first rate hike in more than three years the declining state of the dollar was determined.
Within half a year and less than two months after a second straight rate hike, the figure rose to 40 percent, the data shows — a figure that held steady until November and then dropped to 39.5 percent.
However, the following month it rose again to 40 percent and has since only fallen to the aforementioned 38.7 percent, according to data collected in the last survey period.
To counteract these household bottlenecks, more and more households are resorting to credit cards
The new data shows that since the survey began in August 2020, Americans are still struggling to pay basic bills like housing and groceries
The phenomenon can be traced back to a combination of causes, such as rising food prices over the past two years and rent increases that have risen disproportionately compared to average salaries in the respective states
It shows that while the US economy has mostly recovered and unemployment rates have returned to pre-pandemic lows, it is still in a tough spot — even after 10 straight rate hikes by the Fed
It shows that virtually as many Americans — and significantly more than in the first year of the pandemic — are struggling to cover daily expenses, which include transportation, health insurance, and access to baby food.
The phenomenon can be attributed to a combination of causes, such as the increase in food prices observed over the past two years and rent increases that have risen disproportionately compared to salaries in the respective states.
A recent nationwide baby formula shortage may also play a role, although it’s been more than a year since major manufacturer Abbott triggered the crisis by recalling several products.
By most standards, the shortage has now been resolved – recent market research data shows that formula availability has been back to pre-scarcity levels for more than half a year.
But survey data, also collected by the Census Bureau, showed that may not be the case and that many families are still struggling – after many have been forced to shell out astronomical sums on petrol to find a shop that sells the so important liquid is sold.
However, the proportion of households that are struggling varies widely by region — with states with low average salaries, such as Mississippi and Louisiana, face some of the biggest household problems, according to the Bureau’s most recent survey.
Other states with the worst financial health included Texas, Georgia and Alabama, with several other offenders such as New Mexico and Arizona also coming from the South.
Another potential factor is the rapidly rising inflation rates recorded over the past two years, which have remained high despite ten consecutive increases since March 2022
States like California have been brought to their knees by underperforming metropolitan areas like Los Angeles (pictured), where researchers found nearly half of households are struggling
The City of Angels, which has an average salary of around US$70,000, was recently named the fourth most expensive city in the world according to an authoritative ranking by the Economist Intelligence Unit
Those areas, along with other low-income states like Kentucky and West Virginia, had shares greater than 41.3 percent.
Surprisingly, two Western countries have also made the same cut despite having higher median incomes than their contemporaries.
These were California and Nevada, both weakened by underperforming metropolitan areas like Los Angeles and Las Vegas, where nearly half of households are struggling.
The City of Angels, which has an average salary of around US$70,000, was recently named the fourth most expensive city in the world according to an authoritative ranking by the Economist Intelligence Unit.
The town was recently named the city with the seventh-highest average rent in the country by property tracker Zumper as, like several other cities across the country, it has seen a massive year-on-year increase since the pandemic.
To counteract these household bottlenecks, more and more households are resorting to credit cards.
According to the survey, more than 25 million households say they used credit cards or a loan to stay afloat before their next check-up — up from 22.4 million last year.
The number is the highest since the survey began and could pose problems as inflation rates remain persistently high.
This stubbornness has left the Fed divided on how it will manage its interest rates in the coming months.
The government agency has already raised interest rates by a whopping 5 percentage points over the past 14 months, in the most aggressive streak since the 1980s.
These increases have caused mortgage rates to more than double over the past year, while the cost of car loans, credit card borrowing and business loans have increased.
In addition, home sales have also declined – further proof that Americans still have bigger problems than ever.