Rising Childcare Costs Impact US Consumer Spending and Labor Market

The recent report from the Bank of America Institute highlights the rising childcare costs in the United States, which now average $700 per household per month. This marks a significant 32% increase since 2019, contributing to a quicker depletion of family savings and a slowdown in consumer spending. The findings indicate that these climbing expenses are affecting both consumer behavior and participation in the labor market.

The report also notes a decline in dual-income households this year compared to 2019. This trend suggests that more workers are leaving the labor market due to increasing childcare responsibilities. Furthermore, the situation may worsen with the potential closure of approximately 70,000 childcare facilities nationwide.

Interestingly, the data was gathered before the termination of the Child Care Stabilization program, a $24 billion initiative that previously helped subsidize childcare costs, making it more affordable for families. The conclusion of this program may further complicate the current landscape, as it had played a vital role in improving childcare affordability.

This article was generated with the support of AI and reviewed by an editor.