There’s one group of Americans that’s missing from the picture of this year’s strong consumer spending: families that pay for childcare. Since May, spending by households that pay for childcare has lagged behind the rest of the population, according to a new report by the Bank of America Institute
Not only have they been curbing their spending more than others, but they also are dipping into their savings more, the report found.
Though the difference in spending is “fairly modest,” it “could point to the increasing financial pressure that families with young children face,” the report’s authors said. Nationally, families spent an average of more than $700 a month on childcare in September, according to Bank of America, a 32% increase since 2019. San Francisco and Seattle had the highest average childcare costs in September, nearly twice as much as the national average, the report found. Average childcare costs per household have jumped the most for higher-income families, with annual incomes of $100,000 to $250,000, the report found. Those households may be experiencing bigger cost increases for childcare in part because they can afford to pay more for it, while lower-income families are more likely to cut out childcare when prices go up, said Anna Zhou, an economist at the Bank of America Institute and author of the report. A growing number of higher-income households started using childcare in 2022 following a small baby boom that was largely concentrated among women with college degrees, who tend to have better finances, Zhou said. Overall, the level of households paying for childcare services ticked up slightly from 2019 to 2022, the report said. Some cities have seen a …