Consumer Bureau releases annual report of household savings, financial health indicators — results show alarming level of financial insecurity
The Consumer Financial Protection Bureau (CFPB) this week released its annual analysis of household financial health. For the first time since 2019, this year’s report shows American household financial health declining.
On a number of key indicators of financial health, a significant number of American households reported troubling information.
The key takeaway from the survey is that while unemployment remains low, nearly 40% of American households are not prepared to handle a disruption in their main source of income.
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Specifically, the survey found that 37% of households report that they could not cover expenses for longer than one month, even with accessing savings, borrowing money, selling assets, or seeking help from family and friends.
This number indicates that many households lack adequate savings as a result of both stagnant wages and inflation that has eaten into household budgets.
This may explain why one of the fastest growing categories for Buy Now, Pay Later purchases is groceries:
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That is to say that current employment compensation trends fail to provide sufficient resources for savings or even to cover common emergency expenses such as an automobile repair or an unexpected medical expense.
Renters are also facing challenges with 31% reporting they’ve missed at least one rental payment in the previous year and approximately 8% not current on their rent as of February 2022.
While post-pandemic hiring trends mean workers are in high demand, overall wages have remained relatively stagnant, and expenses continue to increase. Rising interest rates may actually add to this challenging economic environment — slowing employment growth and raising prices across the board.
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Originally published at https://original.newsbreak.com.