Personal finance company LendEDU has conducted a survey of 1,000 adult Americans in the wake of the Conornavirus pandemic to better understand how the personal finances of Americans have been impacted. The report includes a number of findings that help to explain various moves by legislators and also helps to gauge the degree of the economic fallout.
According to the numbers at the time of this writing from Johns Hopkins University of Medicine , there are now over 523,000 cases and more than 23,500 deaths worldwide due to the COVID-19 pandemic. And, while U.S. markets have had a strong past couple of days due to an agreement on the largest stimulus package in American history, many economists still believe the Unites States is headed to a recession because of the virus outbreak.
LendEDU’s survey found that while 35 percent of Americans have maintained the exact same job after COVID-19 began seriously impacting the U.S., 13 percent have seen their hours partially cut, 11 percent have been furloughed, and 6 percent have lost their job. Even still, 57 percent of all workers who have maintained their job in some capacity are concerned about their job security moving forward through this pandemic.
Additionally, 64 percent of Americans had already been living paycheck to paycheck before this virus started impacting the U.S., including 82 percent of those who lost their jobs. 44 percent of respondents have already dipped into a savings account or emergency fund, including 87 percent of those who lost their jobs.
The survey found that the average American has spent $335.65 on food and supplies related to COVID-19, while 69 percent of those who have lost their job anticipate taking on more credit card debt than desired to cover their expenses.
Considering all of the above stats, the analysts at LendEDU say it becomes easy to understand why the stimulus package included provisions to send many Americans $1,200 payments, in addition to providing substantial unemployment coverage like $600 per week. Many Americans, especially those who have been laid off, are going to be running on tight budgets for the foreseeable future so hopefully the actions from federal legislators will help, the report says.
LendEDU’s report also found that 57 percent of Americans are concerned about being able to make the monthly mortgage payment, including 96 percent of those respondents who lost their jobs. These percentages are 63 percent and 88 percent for student loan payments and 54 percent and 93 percent for credit card payments.
According to the report, if consumers begin to default on recurring payments related to their mortgages or student loans, the wider economic fallout could be devastating as this will travel all the way up the food chain. Let’s not forget that it was Americans defaulting on their mortgages that triggered the 2008–2009 recession.
Because of this concern, the report says, a number of legislative actions are under way from the federal government, in addition to state and city governments, suspending foreclosures or evictions for the next couple of months. Further, President Trump waived all accruing federal student loan interest for the time being, while also giving borrowers the ability to skip payments through September.
Read the full report for additional findings.