Survey: Financial Well-Being of Lower-Income Households Continues to Decline
For immediate release
Contact: Katherine Dibling, Senior Media Representative, (215) 574-4119
The Federal Reserve Bank of Philadelphia’s Community Development Studies and Education Department today released the results of the Third Quarter 2011 Community Outlook Survey (COS), which monitors economic factors affecting low- and moderate-income (LMI) households in the region.
The survey asked the 67 participants, who are service providers to LMI households, to evaluate how the financial conditions of their clients had changed from the second quarter of 2011 to the third quarter of 2011. They were also asked about their expectations for financial conditions three months from October 2011.
“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.”
Marty Smith, Community Development Research Advisor, Community Development Studies and Education, Federal Reserve Bank of Philadelphia
Jobs and Affordable Housing
- Seven percent of the participants saw an increase in the availability of jobs for their clients in the third quarter from the second quarter. Forty-one percent saw a decrease, and 53 percent said that the availability of jobs had stayed the same. Twenty-five percent expect the availability of jobs to increase over the next three months; 21 percent expect it to decrease; and 54 percent expect no change.
- Ten percent of participants said that the availability of affordable housing had increased from the second quarter 2011, 33 percent saw a decrease, and 57 percent saw no change. Eighteen percent expect to see an increase in the availability of affordable housing three months from now; 25 percent expect to see a decrease; and 57 percent expect no change.
Financial Well-Being and Access to Credit
- Almost 99 percent of participants reported that they saw no change or a decrease in the financial well-being of LMI households in the third quarter. However, 11 percent expect to see an improvement three months from now.
- Two percent of the respondents reported that access to credit had increased, while 45 percent reported that it had decreased. Fifty-three percent indicated that it had stayed the same.
- Seven percent of survey participants expect their clients' access to credit to grow over the next three months, while 27 percent expect it to shrink. Sixty-seven percent expect no change.
Demand for Services
- Most service providers (78 percent) saw demand for their services increase from the second quarter of 2011, and 22 percent indicated that demand had remained the same. Seventy-eight percent expect demand to continue to increase over the next three months, and 22 percent expect demand to stay the same.
Capacity and Funding
- Thirteen percent reported an increase in their capacity to meet their clients' needs; 27 percent reported a decrease; and 60 percent said there has been no change in capacity since the second quarter. Nineteen percent expect to see an increase in capacity over the next three months; 25 percent expect a decrease; and 56 percent expect no change.
- Ten percent indicated that funding had increased; 59 percent reported that funding had decreased; and 32 percent reported no change. Eighteen percent of the respondents expect to see an increase in their funding three months from now, while 46 percent expect that it will decrease. Thirty-seven 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.