Fed Survey: Economic Recovery from COVID-19 Continues to Disrupt Low- and Moderate-Income Communities

Economic setbacks caused by the COVID-19-related recession are still affecting low- and moderate-income communities, according to new survey findings from the Federal Reserve.

Perspectives from Main Street: The Impact of COVID-19 on Communities and the Entities Serving Them is a national survey of US government agencies, nonprofits, financial institutions and community organizations serving low- and moderate-income communities. (Low-income communities have a median family income of less than 50% of the area median income. Moderate-income communities have a median family income at least 50% and less than 80% of the area median income.)

The survey was administered in August 2022 by the Federal Reserve and seven national partners. It garnered more than 1,700 responses. 

Fewer than 20% of survey respondents said their communities have fully recovered from the economic setbacks caused by the COVID-19 recession.

“While there is no doubt improvement since 2021, these low- and moderate-income communities are still really behind,” said Violeta A. Gutkowski, one of the report author's and lead analyst at the Institute for Economic Equity at the Federal Reserve Bank of St. Louis.

Some of the main barriers to recovery include issues related to inflation, labor shortages and availability of child care. Key findings from the survey include:

• Recovery path: 16% of respondents reported that their communities are almost or fully recovered (80%-100% recovery). In a year’s time, more than 40% expected their communities to be almost or fully recovered. 
• Fewer experienced disruptions than 2021: Since 2021, the percentage of respondents reporting significant disruptions in their communities fell between 30% and 50% across various aspects of the economy except for housing. 
• Household financial stability: Since 2021, 40% fewer respondents reported significant disruptions to household financial stability. However, approximately 40% of respondents still claim that disruptions are significant. Increasing costs for consumer goods and housing were reported as primary reasons. 

About Federal Reserve Community Development  

The Federal Reserve seeks to promote the economic resilience and mobility of individuals and communities throughout the US, including low- and moderate-income and underserved households. Increasing economic opportunity is not only good for individuals and communities but also vital to the overall economy.