EUROZONE INFLATION SPIKES WHILE U.S. INCOME, SAVINGS UP THANKS TO AMERICAN RESCUE PLAN
Washington, DC – Last week, Eurozone inflation rose to a record 8.6% in June, with half of the 19 countries now reaching double-digit annual inflation levels, proving once again that inflation is not a uniquely American problem following a pandemic and Russian war in Ukraine.
Yet despite rising prices due to these global factors, U.S. families are benefiting from the investments made through the American Rescue Plan.
According to a new study by the Federal Reserve Board, 78 percent of adults reported either “doing okay” or “living comfortably financially,” while 68 percent said they would cover a $400 emergency expense. Those numbers are the highest since 2013.
Here’s how Americans have saved more, thanks to the Biden administration’s policies:
Checking and Savings Accounts Grow
In 2021, Americans had more in their checking and savings accounts than before the pandemic.
Compared to two years earlier, checking account balances were about 120 percent higher in March 2021 and about 65 percent higher at the end of 2021.
Savings held in deposits and other financial accounts have increased and borrower distress has decreased, according to the Brookings Institution.
From March 2020 to January 2022, American families gained an estimated $2.5 trillion in savings that they’ve mostly deposited in checking or savings accounts. That’s far better than the Great Recession, when income remained below its pre-recession level for several years.
Higher Wage Jobs
The American Rescue Plan provided a security blanket for Americans to improve their own work situation.
The Bureau of Labor Statistics found that there was a one-to-one correlation between the rate of quitting and swapping jobs. American workers are upgrading.
- More than three times as many workers quit their job as were fired, showing how much power American workers have.
Fifteen percent of workers said they were in a different job than 12 months earlier, with most saying their job change was an improvement, according to the Federal Reserve Board of Governors.
- Americans who found new jobs tended to say their current job has “better pay, more opportunities for advancement and more work-life balance and flexibility,” according to the Pew Research Center.
According to Brookings: “Workers aren’t just sitting on the sidelines—they are opting to move into new jobs, ones that either have higher wages, safer working conditions, or other factors that make them more appealing…These factors have increased worker bargaining power, with positive wage effects.”
Starting Small Businesses at Record Rates
In 2021, Americans applied for and started new businesses at higher rates thanks to the support of the American Rescue Plan.
955,100 applications to form new businesses were filed in the first six months of 2021, 45 percent more than at that point in 2019.
Americans created nearly 5.4 million private businesses in 2021—68 percent higher than the average of 3.2 million per year from 2015 to 2019, according to the Census Bureau.
- To compare, in the years after the Great Recession fewer than 2 million new business applications were filed each year through September.
About Invest in America
Invest In America is a national rapid response operation advocating for robust public investment to rescue the economy from the COVID crisis and create prosperity for the future, and to fight back against fear-mongers who use deficit concerns as a scapegoat to starve American communities and businesses of resources.
The operation consists of two components: Invest in America, the charitable and public education arm, which is a fiscally sponsored project of Economic Security Project funded by the William and Flora Hewlett Foundation and Economic Security Project co-chair Chris Hughes; and Invest in America Action, the advocacy and social welfare arm, which is a fiscally sponsored project of Economic Security Project Action funded by Chris Hughes and the Omidyar Network.