Is the recession really over? New study suggests otherwise

April 08, 2014

Is the recession really over? New study suggests otherwise

Article provided by Warren Luccitti, Esq.
Visit us at http://www.warrenluccittiesq.com

According to economic data, the U.S. recession is over. However, the 7th annual national survey on household wealth accumulation was recently released that indicates otherwise. The study revealed that many Americans who make up the middle class continue to struggle to make ends meet.

The study

The Consumer Federation of America--a non-profit organization that conducts research and promotes education on subjects of consumer interest--surveyed various participants regarding their household saving practices. Roughly 63 percent indicated that they were having difficulty saving any money, or unable to "progress toward meeting their savings needs." Only about 35 percent of participants stated that they were "making good or excellent progress."

To CFA Executive Director Stephen Brobeck, the data reveals that, despite the economic recovery, many are still struggling to make ends meet. "Only about one-third of Americans are living within their means and think they are prepared for the long-term financial future," he said.

The reasons behind the statistic

But if the U.S. recession is over and unemployment rates are down, why are Americans still struggling? Perhaps a big reason is because wages remain stagnant.

The unemployment rate has improved since the recession first hit in 2008. However, Brobeck says that just because more people have jobs doesn't mean that they all have ones that pay enough to keep up with inflation and rising costs of healthcare. Further, despite the improvement in the U.S. real estate market, home prices are not increasing and families are unable to garner home equity like they once could.

Living paycheck to paycheck and the inability to gain home equity means saving money is difficult for many people. Some individuals don't even have enough money to pay for the basic necessities--let alone put money aside into a savings account. According to a recent survey from BankRate.com, almost 25 percent of Americans have significant credit card debt.

Sadly, until action is taken to do something about the erosion of the middle class, more and more individuals will likely find themselves in a position where saving money is impossible.

Examining bankruptcy options

Fortunately, bankruptcy is an option that can help relieve financial strain many people are experiencing. Chapter 7 bankruptcy, for instance, allows individuals to erase their unsecured debt in as little as 90 days. After a bankruptcy is discharged, those once drowning in debt can walk away with a clean financial slate. Speaking with an experienced bankruptcy attorney who can assess individual situations is advised.