The coronavirus crisis drove a dramatic weakening in American households' finances as millions of people lost work or had their hours or pay reduced, with low-wage workers taking the biggest hit, according to a report released by the Federal Reserve on Thursday.
- The coronavirus crisis drove a dramatic weakening in American households’ finances as millions of people lost work or had their hours or pay reduced, with low-wage workers taking the biggest hit, according to a report released by the Federal Reserve on Thursday.
The majority of people who lost work because of the virus were optimistic the job losses would be temporary. Nine in 10 people who were furloughed or lost their jobs said their employers told them they would return to their job at some point. Before the pandemic, 30% of adults said they could not cover three months of expenses by borrowing or using savings. Among adults that had not retired, 25% lacked retirement savings before the crisis, the survey found. Twelve percent of adults said they did not have the savings or credit to cover an unexpected expense of $400, unchanged from the 2018 level.
Among those workers who faced a job loss or reduced hours, 48% said they were either struggling to make ends meet or just getting by, but the figure may understate how many Americans were struggling financially, the Fed said.
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