Consumer finances during the pandemic: Insights from the Making Ends Meet Survey
Despite a massive increase in unemployment starting in March 2020, consumers’ average financial situation improved in the first several months of the pandemic and continued to improve through June 2021. We use three waves of the Bureau’s Making Ends Meet survey and its association with credit bureau data to understand how consumers have managed during the pandemic. We find that pandemic assistance policies such as expanded unemployment insurance and loan flexibilities are responsible for many of these improvements. Consumers were much more likely to face a significant reduction in income during the pandemic than before. But unemployment insurance kept consumers with income drops from facing financial hardship. Consumers who did receive pandemic-related flexibilities generally faced financial hardship. But some pandemic-related flexibilities and forbearance programs failed to reach many consumers facing hardship. Most pandemic polices—including extended unemployment insurance, eviction moratoria, and mortgage and student loan flexibilities—have recently ended or will end soon. Our results suggest these programs helped protect consumers during the pandemic, so their expiration may lead to increased consumer distress unless the economic recovery is strong and equitable enough to make up for the loss of protections.