Fewer Americans Report Income Loss From Pandemic

TransUnion’s latest survey showed the financial hardships of the pandemic eased sharply in the past three months, with optimism rising on the strength of vaccinations, government support and youth.

The Chicago credit reporting agency surveyed 3,027 U.S. adults from May 24 to June 1 and found 32% said their current income had decreased because of the COVID-19 pandemic, down from 38% three months earlier and 51% in late September 2020.

Despite all demographic groups reporting improvements in income, minorities and younger generations reported a higher percentage of income being currently decreased than the total population (Black 39%, Hispanic 39%, Gen Z 41% and millennials 43%).

One in five adults said they are not sure if their finances will recover from being reduced during the pandemic. A large number of them were women in lower income brackets with hourly wage jobs.

Yet, TransUnion’s Consumer Pulse study released Wednesday found the young are reporting more optimism, including higher numbers who are planning to increase retail spending, than other adults.

Charlie Wise, head of global research and consulting at TransUnion, said while the pandemic’s damage lingers for some, he is encouraged by the rising optimism of the young.

“Recent graduates are clearly more optimistic about their future prospects and appear to be more inclined to spend, helping to invigorate the economy,” Wise said.

Consumers who are or plan to get fully vaccinated said they are optimistic and will increase spending. Those describing themselves as optimistic included 67% of the fully vaccinated, 71% of those who plan to get fully vaccinated and 52% of those who don’t plan to get fully vaccinated.

Those planning to be fully vaccinated are most likely to increase spending — 34% of them said they expect to increase their retail spending, compared with 24% for all adults.

Graduates are exhibiting the most optimism for their future prospects with 83% of 2020 and 2021 high school and college graduates reporting they are optimistic about the future, compared to 64% of all adults.

Over half (54%) of recent grads said the pandemic made them more open to using credit in the future — nearly twice the overall group (28%).

Gen Z and millennials said they will increase expenditures across nearly all categories, especially discretionary spending. Compared to all adults, 35% more Gen Zers and 48% more millennials said they will increase discretionary spending.

“As we enter the summer months it will be particularly interesting to observe the spending patterns of the youngest generations,” Wise said. “The pandemic likely impacted this group’s social lives the most and as more of the country opens up and things begin to normalize, we anticipate that the 20- and 30-somethings will be leading the way in spending.”

In another sign of receding impacts, the Mortgage Bankers Association reported Monday that 4.04% of mortgages were in forbearance in the week ending June 6, down from 4.16% a week earlier.

MBA Chief Economist Mike Fratantoni said the latest rate means about two million homeowners remain in forbearance.

“The share of loans in forbearance has now declined for 15 straight weeks, with a larger decline this week as many reached the 15-month mark,” Fratantoni said. “Forbearance exits increased – as is typical in the beginning of a month – and reached the fastest pace since April. New forbearance requests, at 4 basis points, remained at an extremely low level.”