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Thursday, September 18, 2014

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Survey: Financial Well-Being of Lower-Income Households Continues to Decline

For immediate release
Contact: Katherine Dibling, E-mail Senior Media Representative, (215) 574-4119

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The Federal Reserve Bank of Philadelphia’s Community Development Studies and Education Department today released the results of the first quarter 2011 Community Outlook Survey (COS), which monitors economic factors affecting low- and moderate-income (LMI) households in the Third Federal Reserve District.

The survey, which will be conducted quarterly, asked the 82 participants, who are service providers to LMI households, to evaluate how the financial conditions of their clients had changed from the fourth quarter of 2010 to the first quarter of 2011. They were also asked about their expectations for financial conditions three months from April 2011.

About the FIRST Quarter 2011 Survey Results

“Respondents reported that the financial well-being of LMI households continued to decline. Organizations providing services to these households have seen significant increases in demand, while simultaneously facing decreases in their funding and capacity to meet this demand.”

Brian Tyson, Research Analyst, Community Development Studies and Education, Federal Reserve Bank of Philadelphia

Jobs and Affordable Housing

  • Service providers had a slightly negative view of the availability of jobs in the first quarter of 2011 compared with the fourth quarter of 2010. Respondents had more favorable expectations for job availability over the next three months.
  • Only 8 percent of participants said that the availability of affordable housing had increased, while 60 percent indicated that there was no change and 32 percent reported that it had decreased. Expectations three months from now are neutral.

Financial Well-Being and Access to Credit

  • Ninety-nine percent of participants reported that they had seen no change or a decrease in the financial well-being of LMI households in the first quarter of 2011.
  • Four percent of the respondents reported that access to credit had increased, while 36 percent indicated that it had stayed the same and 59 percent reported that it had decreased.
  • The respondents’ future expectations about the financial well-being of LMI households and their access to credit are slightly better. Sixteen percent expect the financial well-being of their clients to increase over the next three months, 35 percent expect it to decrease, and 49 percent expect no change.
  • Ten percent of survey participants expect their clients' access to credit to grow over the next three months, and 32 percent expect it to shrink. Fifty-eight percent expect no change in their clients' access to credit.

Demand for Services

  • Most service providers (76 percent) saw the demand for their services increase from the fourth quarter of 2010 to the first quarter of 2011, with only 1 percent reporting a decrease and 23 percent indicating that it had remained the same.
  • Participants expect the increase in demand to continue over the next three months, with 68 percent expecting an increase and no respondents expecting a decrease in demand.

Capacity and Funding

  • Service providers have seen significant increases in demand, while simultaneously facing decreases in their funding and capacity to meet this demand.
  • Forty-nine percent indicated that funding had decreased.
  • Nine percent of the respondents expect that their funding three months from now will increase, while 53 percent expect that it will further decrease.

The Federal Reserve Bank of Philadelphia helps formulate and implement monetary policy, supervises banks and bank holding companies, and provides financial services to depository institutions and the federal government. It is one of the 12 regional Reserve Banks that, together with the Board of Governors in Washington, D.C., make up the Federal Reserve System. The Philadelphia Federal Reserve Bank serves eastern Pennsylvania, southern New Jersey, and Delaware.

Media Contacts

Marilyn Wimp, ABC E-mail
Manager of Media Relations
(215) 574-4197
(267) 254-4555 (cell)

Daneil Mazone E-mail
Media Relations Representative
(215) 574-7163
(267) 535-1808 (cell)

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