Report: Most Americans unprepared to weather financial storm

Most Americans would be unable to survive for a month on readily available savings if they lost their paycheck, according to a new report.

A new study out Thursday from the Pew Charitable Trusts provides the latest indication that while the overall economy has recovered from the last recession, there are huge swaths of the American public that are still feeling significant financial stress.

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All told, the study determined that 70 percent of American households face at least one of the following three problems: insufficient savings, high debt burdens or monthly expenses that exceed income.

"Despite the national recovery, most families feel vulnerable and stressed, and could not withstand a serious financial emergency," the report claimed. “This reality must begin to change if the American Dream is to remain alive and well for future generations.”

The findings come as both parties are increasingly focusing their message on economic inequality. President Obama made boosting the middle class and combating inequality a central theme of his most recent State of the Union address, and Republicans controlling Congress have also hammered a middle-class message.

The findings from Pew paint a grim picture for many Americans, particularly those at the bottom of the income ladder. Fifty-five percent of households would be unable to cover a month of expenses with funds in easily accessible places like savings accounts. In fact, those making the least amount of money can cover roughly nine days of expenses, placing them particularly at risk of a financial shock.           

And there is little reason to expect significant help in the future. The Pew study found that while income and earnings grew 22 percent between 1979 and 1999, Americans saw just 2 percent growth in that category from 1999 to 2009. The economic downturn pushed consumer spending back to levels not seen since the 1990s, and in the last 25 years spending is now up a net of just 2 percent.

While overall wage growth has been extremely slow over the last several years, the Pew study also found that many households have to grapple with highly erratic income. Since 1979, nearly half of all households experienced an income gain or loss over a two-year stretch that exceeded 25 percent of their previous income.