Inflation Drives More Americans to Skip Bill Payments: Bank of America

A Bank of America logo in New York on Jan. 10, 2017. (Stephanie Keith/Reuters)

Out-of-control inflation is now forcing a significant proportion of Americans to skip their utility payments, according to Bank of America (BoA).

“Around 17 percent of households had either missed or made a late payment. For households with income below $50K, the proportion rises to 25 percent,” BoA said in a Sept. 23 report detailing the results of a survey (pdf).

“If utility prices remain high, which seems quite possible given raised natural gas prices and the hedging dynamic that feathers-in the impact over two to three years, these households could come under pressure to make cuts in their other spending in order to keep the lights on,” it warned.

Around 10 percent of households experienced a drop in their average utility bill payments of more than 20 percent, while 7 percent saw a drop of over 30 percent. BoA believes this is a result of households having “squeezed finances.”

Average monthly payment for utilities was up by 16.3 percent in the 12 months to August. While households earning below $150,000 annually saw price increases in line with the average, those making over this income level saw prices rise by a smaller 11.1 percent.

The bank found little difference across multiple cities when it came to missing or being late on utility payments because of financial difficulties. However, there was a “fairly large variation” in bill increases across cities, the bank noted.

Dallas and Houston saw bills rise by around 25 percent in the three months through August 2022 compared to the same period last year. In contrast, bills in Portland only rose by 3.2 percent, in Phoenix by 2.1 percent, and in Las Vegas by just 0.7 percent.

Higher Utility Payments

According to data from the U.S. Bureau of Labor Statistics, the 12-month Consumer Price Index, a measure of annual inflation, was up by 8.3 percent in August. During this period, energy prices surged by 23.8 percent and electricity costs by 15.8 percent.

A forecast by nonprofit the National Energy Assistance Directors Association calculates that the average American household will pay around 17 percent more this winter to heat their home when compared to the previous winter. Heating costs are expected to hit $1,202 per property, a 10-year high.

In New York, major utility firm Orange & Rockland is forecasting natural gas prices to cost 44 percent more this winter compared to the last. Electricity costs might rise by 28.8 percent, company spokesperson Mike Donovan said in an interview with The Epoch Times.

The U.S. Energy Information Administration calculates the residential price of electricity to average 14.8 cents per kilowatt-hour in 2022, which is up by 7.5 percent from last year.