New Financial Health Data Shows Many Americans Miss Financial Recovery Despite Economy Reopening
Stable overall revenues and slow spending in the dataset
Balances increased throughout the first quarter, along with stimulus payments and tax refunds. They fell somewhat in the second quarter but remained higher than at the start of the year.
Entries in liquid accounts decreased over the quarter for those who experienced difficulties and remained stable for those who did not.
Chicago, Illinois, Aug.31, 2021 (GLOBE NEWSWIRE) – The Financial Health Network, the national authority on financial health, with support from the Citi Foundation and additional funding from the Principal Foundation, today released its latest Financial Health Pulse Points for Q2 2021. This regular review of consumer transactions found that despite the economy reopening after the shutdowns, most household incomes remain stable, savings stagnate and spending has stagnated. slightly decreased for most categories. Overall, this reinforced inequalities in financial health for low-income and struggling households, and could portend further divergences in the second half of the year.
Personal savings rates fell dramatically as stimulus payments ended, dropping to 9.4% from a high of 26.9% in the first quarter.
Income has remained largely stable, corrected for stimulus and tax payments. The exception were households facing hardships such as housing or food insecurity, whose income fell by 17% in the second quarter.
Overall consumer spending fell almost 9% from the first quarter after the boom that accompanied disbursements at the start of the year.
The only exceptions were credit card spending by households with incomes over $ 100,000 on recreation (280% increase to $ 31 per month) and travel (70% increase to $ 92 per month).
Cash account balances ended up nearly 11% higher at the end of the second quarter than they were at the start of the year, much of the increase attributed to saved stimulus payments.
The peak in liquid account balances, per transactional Pulse data, occurred in late April, after the start of the third disbursement of stimulus payments.
“The Pulse dataset shows that recovery is not yet manifesting itself for the people who need it most,” said Rob Levy, vice president of research and measurement at the Financial Health Network. “Stimulus and tax refunds did their job in helping financially vulnerable people make ends meet in the last quarter and while the child tax credit is expected to help families, a patchy recovery could put these gains at risk in the second half of 2021. “
Pulse Points provides regular and timely updates on financial health in America using account and transaction data from Financial Health Pulse. These briefs complement the annual Pulse Trends reports released each fall, which highlight major trends in the financial health of Americans and the way they spend, save, borrow, and plan. The Pulse Point analysis is based on transactional and account data from approximately 500 USC consumer panel members who have agreed to share their data through a secure platform that leverages the Plaid API.
About the Financial Health Network
The Financial Health Network is the leading authority on financial health. We are a trusted resource for business leaders, policy makers and innovators united in a mission to improve the financial health of their customers, employees and communities. Through research, advisory services, measurement tools and opportunities for cross-sector collaboration, we advance awareness, understanding and proven best practices in support of better financial health for all. To learn more about the Financial Health Network, visit www.finhealthnetwork.org and follow us on Twitter at @FinHealthNet.
About the pulse of financial health
The Financial Health Pulse is supported by the Citi Foundation, with additional funding from the Main Foundation. Since the initiative’s launch in 2018, the Financial Health Network has worked with USC’s Dornsife Center for Economic and Social Research to present the study to their online panel, Understanding America Study. Study participants who agree to share their transaction and account data use Plaid’s data connectivity services to authorize analysis of their data.
CONTACT: Naomi Adams Bata Financial Health Network 312-881-5847 [email protected] Stephanie Hicks Cosmo PR 805-295-9455 [email protected]