Lower-income Americans are starting to face nascent signs of financial turbulence now that government support programs tied to the coronavirus pandemic have wound down, but any problems are relatively contained so far, Reuters reported. The Federal Reserve Bank of New York said in a report yesterday that for lower income households, “early delinquencies” on car and credit card loans started to rise in 2022 and are now higher than they were before the pandemic began in the spring of 2020. “Financial stress appears to have risen” for lower-income households, the report said, while noting any rise in trouble compares to very low levels of financial trouble seen before the pandemic. The report noted that even higher-income Americans are facing challenges on mortgages, auto loans and credit cards since 2021, with all measures at or just above where they were before the pandemic. But the researchers added, “lower-income areas have seen higher delinquency rates compared to high-income areas.” The report saw lower-income Americans as caught between a pull back in support and a more challenging economic environment. Read more.
