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Saturday, November 22, 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 second quarter 2011 Community Outlook Survey (COS), which monitors economic factors affecting low- and moderate-income (LMI) households in the region.

The survey asked the 80 participants, who are service providers to LMI households, to evaluate how the financial conditions of their clients had changed from the first quarter of 2011 to the second quarter of 2011. They were also asked about their expectations for financial conditions three months from July 2011.

About the Second Quarter 2011 Survey Results

“Survey respondents noted financial factors facing LMI households declined at a similar rate as in our previous survey. Demand for services increased, while service providers continue to face challenges maintaining their funding and capacity to serve their clients' needs.”

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

Jobs and Affordable Housing

  • Seventeen percent of the participants saw an increase in the availability of jobs for their clients in the second quarter from the first quarter. Thirty-two percent saw a decrease, and 51 percent said that the availability of jobs had stayed the same. Twenty-two percent expect the availability of jobs to increase over the next three months; 19 percent expect it to decrease; and 59 percent expect no change.
  • Sixteen percent of participants said that the availability of affordable housing had increased from the first quarter 2011, compared with 8 percent who had seen an increase in affordable housing from the fourth quarter 2010 to the first quarter 2011.
  • Thirty-two percent reported that the availability of affordable housing had decreased, and 52 percent indicated they saw no change from the first quarter.
  • Nineteen percent expect to see an increase in the availability of affordable housing three months from now; 25 percent expect to see a decrease; and 55 percent expect no change.

Financial Well-Being and Access to Credit

  • Ninety-nine percent of participants reported that they saw no change or a decrease in the financial well-being of LMI households in the second quarter.
  • Four percent of the respondents reported that access to credit had increased, while 34 percent reported that it had decreased. Sixty-two percent indicated that it had stayed the same.
  • The respondents’ future expectations about the financial well-being of LMI households and their access to credit are slightly better than in the first quarter. Four percent expect the financial well-being of their clients to increase over the next three months, 31 percent expect it to decrease, and 65 percent expect no change.
  • Nine percent of survey participants expect their clients' access to credit to grow over the next three months, while 31 percent expect it to shrink. Sixty percent expect no change.

Demand for Services

  • Most service providers (79 percent) saw demand for their services increase from the first quarter of 2011, with only 1 percent reporting a decrease and 20 percent indicating that demand had remained the same.
  • Sixty-three percent expect the increase in demand to continue over the next three months; four percent expect a decrease; and 33 percent expect demand to stay the same.

Capacity and Funding

  • Fifteen percent reported an increase in their capacity to meet their clients' needs; 30 percent reported a decrease; and 55 percent said there has been no change in capacity since the first quarter. Fifteen percent expect to see an increase in capacity over the next three months; 33 percent expect a decrease; and 51 percent expect no change.
  • Eight percent indicated that funding had increased; 58 percent reported that funding had decreased; and 34 percent reported no change.
  • Thirteen percent of the respondents expect that their funding three months from now will increase, while 50 percent expect that it will decrease. Thirty-eight percent expect no change.

The Federal Reserve Bank of Philadelphia helps formulate and implement monetary policy, supervises banks and bank and savings and loan 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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