New Financial Health Pulse Data Shows Many Americans Missing Out on Financial Recovery Despite the Economy Reopening

Overall incomes flat and spending slowed across data set

Chicago, Illinois, UNITED STATES


Chicago, IL, Aug. 31, 2021 (GLOBE NEWSWIRE) -- The Financial Health Network, the nation’s authority on financial health, with support from the Citi Foundation and additional funding from Principal Foundation, today released its latest Financial Health Pulse Points for the Second Quarter of 2021. This regular examination of consumer transactions found that despite the economy reopening post lockdowns, most household incomes remain flat, savings are stagnant, and spending declined slightly for most categories. Overall, this reinforced financial health inequities for low-income households and those experiencing hardships, and could forecast further divergence in the latter half of the year.   

Top-line findings:

  • Personal savings rates dropped significantly as stimulus payments ended, dipping to 9.4% from a Q1 high of 26.9%.
  • Incomes remained largely flat, adjusted for stimulus and tax payments. The exception was households experiencing hardships such as housing or food insecurity, which declined 17% in income during the second quarter.
  • Overall consumer spending declined nearly 9% from the first quarter after the boom that accompanied disbursements at the start of the year.
  • The only exceptions were credit card spending by households with income greater than $100,000 on recreation (increased 280% to $31 per month) and travel (increased 70% to $92 per month).
  • Liquid account balances ended nearly 11% higher at the end of Q2 than they were at the start of the year, much of the increase is attributed to saved stimulus payments.
  • The peak in liquid account balances, per Pulse transactional data, occurred late April, after the third stimulus payment disbursement began.

“The Pulse dataset shows that recovery is not yet showing up for people who need it most,” said Rob Levy, VP of research and measurement at the Financial Health Network. “The stimulus and tax refunds did their job helping financially vulnerable people make ends meet over the last quarter and while the Child Tax Credit is expected to help families, an uneven recovery could put those gains in jeopardy in the second half of 2021.” 

Pulse Points offers regular, timely updates on financial health in America using account and transaction data from the Financial Health Pulse. These briefs supplement the annual Pulse Trends Reports released each fall, which highlight broad trends on the financial health of Americans and how they spend, save, borrow and plan. Analysis for the Pulse Points is based on transactional and account data from approximately 500 members of USC's consumer panel who agreed to share their data through a secure platform that leverages Plaid’s API

About the Financial Health Network

The Financial Health Network is the leading authority on financial health. We are a trusted resource for business leaders, policymakers and innovators united in a mission to improve the financial health of their customers, employees and communities. Through research, advisory services, measurement tools, and opportunities for cross-sector collaboration, we advance awareness, understanding and proven best practices in support of improved financial health for all. For more on the Financial Health Network, go to www.finhealthnetwork.org and follow us on Twitter at @FinHealthNet.

About the Financial Health Pulse 

The Financial Health Pulse is supported by the Citi Foundation, with additional funding from Principal Foundation. Since the inception of the initiative in 2018, the Financial Health Network has collaborated with USC’s Dornsife Center for Economic and Social Research to field the study to their online panel, the Understanding America Study. Study participants who agree to share their transactional and account data use Plaid’s data connectivity services to authorize their data for analysis. 

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Balances rose throughout Q1 alongside stimulus payments and tax refunds. They fell somewhat in Q2 but remained higher than the start of the year. Inflows to liquid accounts fell over the quarter for people who had experienced hardship, and remained steady for those who had not.

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