The U.S. unemployment crisis hasn’t come to an end! According to CNN, another 803,000 Americans filed for unemployment benefits in the last week of December.
As most Americans deal with depleted savings, here’s what else requires our attention:
A quick look at the current state of unemployment
According to the U.S. Bureau of Labor Statistics’ official data, November 2020 saw significant improvement in the unemployment statistics. The unemployment rate came down to 6.7%. This was roughly 3.2% lower than the all-time high from April.
However, the number of long-term unemployed individuals increased by 385,000 and reached 3.9 million. These are the number of individuals who remained unemployed for 27 weeks or more.
Other than that, the overall rate of labor force participation also came down to 61.5% in November. This was far below the February level.
How did unemployment affect Americans?
According to a Pew Research Center Survey, over half of Americans who lost their jobs due to the coronavirus outbreak are still unemployed! Furthermore, ever since the pandemic began, around one-in-four adults had trouble paying their bills.
Around one-third have resorted to their retirement accounts to get by. Another one-in-six ended up borrowing money from friends and family or got some food from a food bank. These trends are more prevalent among low-income adults, Hispanic Americans, and the ones with no college degree. Among these low-income adults, as many as 32% stated that they had trouble making their mortgage payments.
The impact on savings
Losing their jobs was just one aspect of the economic fallout. A significant number of individuals also had to take a pay cut or reduce their working hours, if not lose their jobs. 32% of the survey respondents also stated that another family member of theirs went through something similar. Around 60% of those still working earn less than they did before the pandemic outbreak. Only 34% of the respondents stated that their income levels were the same.
The pandemic also curtailed an average American jobseeker’s ability to save money. As many as 36% of the respondents stated that they’re now saving less than before the pandemic. Among those who are saving less, around 51% of the individuals belonged to low-income groups. Another 35% were middle-income adults. You’d be surprised to know that even 21% of the upper-income tier sad that they’re now saving less.
If you’ve somehow been affected by the economic fallout, some concrete wealth management and savings advice can help. SJG Financial Services is an investment planning and advisory service from Santiago. Get in touch.