About 8 million Americans that received enhanced food-assistance benefits have been going hungry ever since the program ended earlier this year. It’s also hitting economic growth.
(Bloomberg) — About 8 million Americans that received enhanced food-assistance benefits have been going hungry ever since the program ended earlier this year. It’s also hitting economic growth.
One in four households that received additional pandemic-era food subsidies say they “sometimes” or “often” don’t have enough to eat ever since the program was lifted in 32 states on March 1, according to a Census Bureau analysis published Thursday.
The results “marked the first full period of data collection after most households received lower SNAP amounts,” Census said in a press release.
A family of four with an income of $2,000 per month now gets $340 on average in Supplemental Nutrition Assistance Program benefits each month — $600 less than before the expiration. According to economists at Morgan Stanley, the impact is already visible in the latest figures on gross domestic product for the first quarter.
“Consumption was weak late in the quarter due to a drop in SNAP benefits in March, as well as warmer weather pulling consumption activity forward,” Morgan Stanley economists led by Ellen Zentner wrote in a note Thursday, following the release of a Commerce Department report showing GDP growth slowed to 1.1% annualized over the last three months.
“The loss of benefits will carry on” into the second quarter, “and is expected to weigh on consumption,” they said.
The Morgan Stanley team estimates that the expiration of benefits resulted in a hit to disposable income as large as $4 billion from February to March, or $50 billion annualized. They also see the end of Covid-era stimulus translating into a significant drag on disposable income in the second quarter, resulting in a decline in overall consumer spending.
Through SNAP, low-income families and individuals receive cash benefits loaded onto a card that can be used to buy groceries at authorized stores. The average payment for a family of four surged from less than $50 before the pandemic to about $650 at the height of it.
The enhanced benefits helped many families stay afloat as the prices of many basic items, from meat to eggs soared.
Some local governments increasingly opted out of the emergency SNAP allotments as vaccines rolled out and local economies reopened. Since March, the share of households reporting food insufficiency in the states that kept the program until then has risen to the same level of those states that ended the program early, the Census data showed.
A rising number of Americans are now turning to credit cards and less regulated types of financing to make ends meet as pandemic-era benefits get lifted one after another.
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