Ultra-low US unemployment rate masks financial struggles for many
Sales of new homes slow in April as market cools
WASHINGTON, May 23, (Agencies): Despite an ultralow 3.9 percent unemployment rate, about one-third of US adults faced financial insecurity last year and often struggled to pay unexpected expenses, a Federal Reserve survey found.
For three in 10 adults, their monthly incomes fluctuated — often because their work schedules changed at short notice — and that caused about one in ten Americans to miss some bill payments, according to the report released Tuesday. Forty percent of adults would have had to borrow money or sell something to pay an emergency expense of just $400.
The data suggests that financial security evades even many of those who are working. About one-third of US adults relied on “gig” work or side jobs last year to bolster their incomes. Fewer than four of 10 Americans think their retirement savings are sufficient, and a quarter have none at all, the Fed survey found.
At the same time, the survey finds the improving economy is benefiting more Americans, at all education and income levels. Nearly three-quarters of US adults say they are either “living comfortably” or “doing OK” financially, up from 71 percent in 2016 and 10 points higher than when the annual survey began, in 2013.
Just 7 percent of adults said it was difficult to get by financially last year. That’s down by about half from 2013.
Still, separate government data shows that the percentage of people getting raises remains below where it was before the 2008-2009 recession.
Other findings from the report include:
For the first time, the Fed’s survey asked about opioids, and found that one-quarter of white Americans — and one-fifth of Americans overall — know someone addicted to opioids. Those exposed to opioid addiction are somewhat less likely to say that their local economy is good or excellent, the report found.
Just two-thirds of blacks and Latinos say they are living comfortably or doing OK financially compared with 77 percent of whites. Yet those figures have increased 12 points for blacks and Latinos since 2013 and 10 percent for whites.
Only 57 percent of unmarried parents say they are at least doing OK financially, compared with 76 percent of married parents. Married couples with no children are doing even better, with 84 percent saying they are at least doing OK.
Thirty-one percent of adults did some form of “gig work” in 2017, though that figure includes contract work such as house cleaning and child care. Sixteen percent engaged in online activities, such as online selling and working for ride-hailing services. Roughly 40 percent of gig workers did so to supplement their income from other jobs. And for more than three-quarters of gig workers, the extra jobs accounted for 10 percent or less of their family’s income, the report said.
Meanwhile, US new home sales slowed last month as the tight housing market showed some signs of slackening and prior months were revised down, according to government data published Wednesday.
Supplies of homes for sale increased and the median price fell in April to the lowest level in a year, pointing to a possible dip in demand that could weigh on GDP growth in the second quarter, according to the Commerce Department report.
But there were signs of an uptick in activity at the luxury end of the market, which pushed the average price to the highest level on record.
Total sales of newly constructed single-family houses fell 1.5 percent compared to March to an annual rate of 662,000 units, seasonally adjusted.
That undershot economists’ expectations, which called for 677,000.