With pandemic-era support gone and inflation taking a toll, many consumers can’t pay their bills and feel bleak about the future, according to research from The Financial Health Network and USC.

Pandemic-era financial support from the federal government has dried up and inflation is taking a toll, leaving more U.S. households struggling, according to this research from The Financial Health Network and the University of Southern California's Dornsife Center for Economic and Social Research.

For many, the future also looks bleak, as the number of consumers expecting to be worse off financially in five years “rose sharply between 2020 and 2026,” according to their report.

Recently enacted restrictions on federal nutrition and medical assistance programs have offset tax breaks. Student loan delinquencies — a priority during the Biden administration — are now occurring at high rates, with more than a quarter of student loan borrowers saying they are financially vulnerable, up from 21% last year. Many immigrants have left the workforce amid heightened immigration enforcement, which has reduced spending in that cohort.

Since January 2018, prices have risen 35% for low-income consumers and 31% for high-income consumers, according to Numerator.

“Perhaps in response to the volatility of the post-pandemic world, U.S. households began to express a growing sense of financial uncertainty and pessimism,” the Financial Health Network authors said in their report. “Uncertainty about expectations for both earnings growth and inflation grew following the pandemic.”

Despite these pressures, consumer spending has held steady this year even on discretionary items.

Source link