Financial conditions worsened dramatically for people who experienced job loss or reduced hours in March as COVID-19 swept across the United States, according to a report released Thursday by the Federal Reserve Board.
In April, fewer adults reported that they were at least doing okay financially six months earlier, said the latest Report on the Economic Well-Being of U.S. Households.
A smaller supplemental survey showed that 43 percent of adults were “doing okay” financially, and 29 percent were “living comfortably,” down from 75 percent and 36 percent, respectively, in the fall of 2019.
“The survey data show that early in the public health crisis, a larger fraction of Americans were facing financial hardship than in the fall of 2019,” said Federal Reserve Board Governor Michelle W. Bowman.
The declines in self-reported financial well-being were concentrated on those who lost a job or had their work hours cut, the report showed.
Among adults not experiencing a job loss or reduction in hours, 76 percent were at least okay financially in April.
Among those who experienced a job loss or hours reduction, however, 51 percent indicated that they were doing at least okay financially in April, whereas 48 percent were “finding it difficult to get by” or “just getting by.”
Some 19 percent of all adults reported either losing a job or experiencing a reduction in work hours in March, the report showed, while noting that some people took on new or additional employment in the month.
Nine in 10 people who were furloughed or lost a job said that their employer indicated that they would return to their job at some point, according to the report.
However, in general, people were not told specifically when to expect to return to work.
The report also showed that consistent with the employment declines in March, many people have experienced income declines. Twenty-three percent of all adults, and 70 percent of those who lost a job or had their hours reduced, said their income in March was lower than in February.
The survey was released one day after U.S. Federal Reserve Chairman Jerome Powell said the COVID-19 crisis raises “long-term concerns,” and warned that a prolonged recession and weak recovery could lead to an extended period of low productivity growth and stagnant incomes.
The U.S. Bureau of Labor Statistics recently reported a staggering 20.5-million job loss in April, which erased a decade of job gains since the global financial crisis and pushed the unemployment rate to a record 14.7 percent.
Powell said the COVID-19-induced job crisis has disproportionately weighed on lower-income households and families.
Teasing data from the survey, he said among people who were working in February, almost 40 percent of those in households making less than 40,000 dollars a year lost a job in March.
“This reversal of economic fortune has caused a level of pain that is hard to capture in words, as lives are upended amid great uncertainty about the future,” Powell said, adding that he expects unemployment to peak next month.