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Americans are having more trouble paying their bills

Yahoo Finance’s Rick Newman breaks down some recent Census Bureau data showing that some Americans are facing tighter finances right now despite a fairly strong economic recovery.

Video Transcript

ALEXIS CHRISTOFOROUS: Welcome back. The economy is improving, yet more people are having trouble paying their routine bills. Yahoo Finance's Rick Newman joins us now with why more Americans seem to be running out of money. Hey, Rick. You know, just recently, right, we were talking about Americans being flush with cash. So what's happening?

RICK NEWMAN: Not everybody is flush with cash. This comes from Census Bureau surveys. And compared with the situation in May, which was about two months after Congress passed that last huge stimulus relief bill, more people say they are having trouble now paying normal household expenses, and fewer people say that household expenses are not a problem.

So it's getting a little tougher to pay the bills. We are also seeing an increase in people using credit cards to pay for routine household expenses. So among some Americans, at least, there is a tighter crunch on cash than there was six or nine months ago. And this is kind of puzzling, because the economy has continued to get better since then.

Unemployment is lower, more people are working, and the economy keeps growing. Of course, one negative in the economy over the last nine months has been inflation, which is now at around 6.8%. So that is probably a factor. People might be going back to work, but inflation is rising more than their regular bills. So this is one of the reasons that Americans generally in a bad mood right now.

- Rick, there are murmurs of the federal government coming in and maybe extending more sort of support. Is that something that we necessarily need more of right now?

RICK NEWMAN: Well, I mean, it's a great question. Some people need it. But is it possible at a political level? It's unclear. Nancy Pelosi, the Democratic House Speaker, on one of the recent Sunday morning talk shows, she said, it's possible we could see some additional relief funds for industries such as the restaurant industry, some leisure and hospitality.

President Biden has not asked for that, and it seems very unlikely we're going to see anything on the scale of another $1,200 stimulus check or more of that extended unemployment aid. That just seems to be politically unpopular at this point. So the most we might get in the next few months is something very targeted and way below that $2 trillion price tag from last March.

ALEXIS CHRISTOFOROUS: Hey, Rick, real quick-- we have 11 million job openings. So you would think that people who want a job can get a job. Why aren't those two things sort of meshing right now?

RICK NEWMAN: A bit of a mystery, Alexis. A lot of those jobs might be postings that companies have open just to see if they can get a dream candidate-- you know, somebody who's overqualified. There are a lot of people who say, and I've been getting a lot of feedback from people saying, if there are all these jobs out there, why can't I find one?

There are a lot of people looking for jobs. This is not just people sitting around hoping for a handout. They're having a very hard time finding jobs. Not all companies are offering pay raises, and better benefits, and more flexibility. So it's still pretty tough out there in parts of the labor market.

- This is part of an article that I wrote yesterday saying, look, the pendulum is swinging. And right now, all indications are that it's a tight labor market, and so that workers have the upper hand, and asking for raises, and things like that. But you know with the pendulum, it's always going to swing back in the other direction. And that seems to be coming up soon.

So do you see more people sort of reaching out, and going for the jobs, and sort of even if they have a boss they don't like or whatever, that they will sort of start jumping into the fray? Because you're seeing this stimulus money that's been in their bank accounts now start to dry up.

RICK NEWMAN: It's one of the great questions. So a lot of analysts and some economists have said, look, one of the reasons more people are not looking for jobs is they've been getting these handouts from the government. And yet, we have not seen this surge of new workers in the labor force now that most of that aid is gone. I think we have to remember, COVID is still a big factor here in at least a couple of different ways.

There are some parents who would like to work but simply cannot. They have to take care of kids whose school schedules are being disrupted or maybe they have sick relatives. Affordable child care is very hard to find. And there are probably at least a few other million people who are worried about going back to a job because they don't feel it's safe. They think they could still get sick from COVID.

So COVID is still in charge. We keep saying that. And that's true with a lot of these jobs. So once COVID, if we can just get it in retreat, I think we will certainly see more people coming out and looking for work.

ALEXIS CHRISTOFOROUS: We certainly hope so. Rick Newman, thanks so much for that.