Pandemic postponed major financial decisions for 2 in 5 Americans, survey finds
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Another Thursday means another chance to take the temperature of this economy by way of the Labor Department’s weekly report on unemployment claims.
“Still ailing” is the diagnosis — initial state jobless claims went up for a second straight week to 744,000 — higher than any week in the Great Recession.
On the other hand, claims in the federal program for gig workers were down, and the total number of Americans claiming jobless benefits fell as well.
But it’s still above 18 million people.
Bottom line is a lot of American consumers are still hurting. And that’s causing them to hold back on some big, lifetime financial decisions.
When the economy turned bad last year, a lot of consumers got very cautious, said Mark Hamrick at Bankrate.com. “This is a good time to pay down debt. Emergency savings needs to be a priority. We’re reminded that the economy can take a negative turn seemingly without much notice.”
And they’ve stayed cautious. Bankrate’s latest consumer survey finds:
“Two in five Americans delayed a major financial decision, or what we’ve called a milestone,” he said.
Like buying a car or a home, going back to school, “but also getting married, having children and even retirement,” Hamrick said.
And — despite the latest relief payments — Americans still feel less optimistic about the current state of their personal finances than before the pandemic, said John Leer at Morning Consult.
“With consumers living in Southern and Western states further from financial recovery than those who live in the Northeast and Midwest,” he said.
Unemployment benefits tend to be lower in Southern and Western states, and those areas have been hit harder by declines in tourism.
Now, as vaccination spreads and businesses and schools reopen, consumers will start spending like they used to, said Nick Shields at the research firm Third Bridge. “You’ll see a lot of companies sort of pitch this idea of ‘You can do so many more things that you weren’t able to do for a year, whether it be buying the new car.…’”
Or dropping a few grand and finally going away on vacation.
COVID-19 Economy FAQs
Can businesses deny you entry if you don’t have a vaccine passport?
As more Americans get vaccinated against COVID-19 and the economy begins reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.
Give me a snapshot of the labor market in the U.S.
U.S. job openings in February increased more than expected, according to the Labor Department. Also, the economy added over 900,000 jobs in March. For all of the good jobs news recently, there are still nearly 10 million people who are out of work, and more than 4 million of them have been unemployed for six months or longer. “So we still have a very long way to go until we get a full recovery,” said Elise Gould with the Economic Policy Institute. She said the industries that have the furthest to go are the ones you’d expect: “leisure and hospitality, accommodations, food services, restaurants” and the public sector, especially in education.
What do I need to know about tax season this year?
Glad you asked! We have a whole separate FAQ section on that. Some quick hits: The deadline has been extended from April 15 to May 17 for individuals. Also, millions of people received unemployment benefits in 2020 — up to $10,200 of which will now be tax-free for those with an adjusted gross income of less than $150,000. And, for those who filed before the American Rescue Plan passed, simply put, you do not need to file an amended return at the moment. Find answers to the rest of your questions here.
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