By Mike Brown
The COVID-19 global pandemic is the worst the world has seen since the Spanish Flu in 1917, and the toll has become unimaginable.
Here in the U.S., the deadly virus has left the nation paralyzed and heading towards a recession. With social distancing guidelines in place, small businesses have had to close, while nearly 20 million Americans have filed unemployment claims in the span of just three weeks as the economic engines have all but shut off in an unprecedented timeframe.
With such grim financial tidings brought on by COVID-19, LendEDU, a personal finance company, sought to evaluate how the changes are impacting the everyday American’s pockets.
The company conducted two identical surveys of 1,000 adult Americans over the course of two weeks. The first study was conducted on March 18, while the second survey was conducted on April 1.
As expected, the survey-to-survey results painted a picture of the worsening financial situation faced by so many Americans as the impacts of COVID-19 become more significant.
Unemployment Doubles
LendEDU’s first survey of 1,000 adult Americans was conducted on March 18, and it found 35% of respondents had seen no changes to their jobs due to the coronavirus, while 6% had been laid off, 13% had seen their hours cut, and 11% had been furloughed.
Things changed quite a bit when the second survey ran two weeks later on April 1.
From survey-to-survey, the percentage of Americans that have lost their jobs due to the global pandemic doubled from 6% to 12%.
Further, there was a drop of 11 percentage points in terms of adults who have seen no changes to their jobs, while the percentage of respondents that have been furloughed increased by two percentage points.
As the threat of the coronavirus continues to call for social distancing measures, there has been a rippling impact on both large and small American businesses that has forced them to cut costs and unfortunately lay people off.
For example, a restaurant closes down because of federal guidance and has to fire staff to remain afloat. With the establishment no longer operating, the farmer that was sending his produce there loses a client and might also have to lay people off. And, the shipping company that was connecting farmer to restaurant also faces the same problems with no demand.
From Survey-to-Survey, Growing Expenses Are Tightening Budgets
Managing finances during the Coronavirus has become increasingly difficult for many Americans, especially for those who have been laid off.
For example, the amount of money that the average American had spent on food and supplies due to COVID-19 was $335.65, according to LendEDU’s first survey. This figure increased by 88% to $631.06 when the second survey was conducted two weeks later.
Additionally, LendEDU’s second report revealed 63% of poll participants were concerned about running out of money in their accounts due to the coronavirus and its impacts. This percentage jumped to 88% when just looking at the results of respondents who have been laid off.
LendEDU also saw a notable increase in the percentage of Americans that have had to reach into a savings account or emergency fund to cover their expenses.
While 44% of respondents had to rely on funds from a savings or emergency account on March 18, 51% had to do the same when the second survey ran two weeks later.
Hopefully, the one-time $1,200 payments that many Americans will be receiving from the federal government will help relieve financial pressure felt by so many consumers right now.
Concerns Over Retirement Savings Continue to Mount
The COVID-19 global pandemic has set financial markets into a massive tailspin heading towards a recession.
Despite a strong day or two every once in a while, the stock market is still down significantly since the start of 2020 and it’s likely to get even worse. LendEDU found this outlook has many Americans, especially older ones, growing concerned about their retirement savings.
From survey-to-survey, there was a jump of nine percentage points when it came to respondents who are concerned about their retirement savings due to the ongoing coronavirus pandemic.
And for older Americans ages 55 and up that had retirement in sight, the percentage of them that are worried about their retirement nest eggs increased from 67% on March 18 to 71% on April 1.
While it can be challenging not to panic in the unprecedented times we currently find ourselves in, it’s important to remember that the market will always rebound just as we as a nation will bounce back from this pandemic.
Mike Brown is director of communications with LendEDU.