New Data Shows Certain Populations Under More Economic Stress Due to COVID

More Americans are feeling financial hardship from the pandemic than a month ago, reversing a trend of gradual improvement from previous monthly surveys, according to a TransUnion report released Tuesday.

In its latest Financial Hardship Study, based on an online survey of 3,100 adults conducted Oct. 28, the Chicago credit reporting agency found 54% of Americans are financially impacted by COVID-19, up from 51% in its Sept. 30 survey.

TransUnion found other key indicators have reversed. The change is being driven by younger generations and Hispanic consumers — segments that have reported high levels of impact throughout its surveys.

Among those impacted, 77% said they are concerned about being able to pay bills and loans, up from 70% a month ago and back to its highest levels.

To meet cash needs, more consumers said they plan to take out new credit products, more consumers are saving additional money in emergency funds and more are tapping their available credit more heavily.

Among impacted consumers who are concerned about paying bills, the portion reaching out to companies to discuss payment options reached an all-time high of 64%.

Half of all respondents said they plan to decrease discretionary spending over the next three months.

Overall financial impact has risen to its highest level since July’s survey, and remains highest among millennials, rising from 59% on Sept. 30 to 65% on Oct. 28, and Hispanics, 60%. Americans working in retail rose from 59% impacted Sept. 30 to 64% Oct. 28. Among restaurant workers, those impacted rose from 65% Sept. 30 to 68% Oct. 28.

“Younger generations, Gen Z and millennials make up a disproportionate part of the restaurant and food services (70%) and retail (61%) workforce, so hardship among these consumer segments is thus expected to continue,” the report said.

Significant increases in job losses were reported among restaurant and retail workers impacted by the pandemic.

Job losses were reported Oct. 28 among 36% of restaurant and food service workers, up from 22% a month earlier. Among retail workers, 28% in the October survey said they had lost their job, up from 22% in September. Meanwhile, job losses reported among all respondents remained stable at 19%.

Among those holding onto their jobs, work-hour reductions were reported by 42% of impacted consumers Oct. 28, up from 38% a month earlier and nearly back to the high of 45% reported when TransUnion began the surveys in March. This increase was driven by Hispanics, 49% of those impacted reporting shorter hours Oct. 28, up from 37% a month earlier; millennials, 47%, up from 44% a month earlier; and Gen Zers, 46%, up from 40% a month earlier.

Small businesses have also continued to struggle, with a high of 16% of small business owners reporting that they have closed with Gen Zers and millennials closing at slightly higher rates.

Among those with accommodations on loans, their top repayment preferences were:

• 29% wanted to resume regular payments and work with the lender to extend the length of the loan.
• 17% wanted to create a repayment plan to catch up while making larger payments.
• 15% wanted to extend the accommodation.