Americans earning around $40,000 were “desperate” for their tax refunds this past spring, the head of tax preparation giant H&R Block Inc. said Thursday, suggesting a potential fragility in US household finances.
(Bloomberg) — Americans earning around $40,000 were “desperate” for their tax refunds this past spring, the head of tax preparation giant H&R Block Inc. said Thursday, suggesting a potential fragility in US household finances.
“The consumer, we definitely saw this year struggling,” H&R Block Chief Executive Officer Jeffrey Jones told Bloomberg TV. “We saw the consumer really seeking their refund faster.”
Sentiment about the US economy has improved lately after a series of strong data reports, including on household spending. That’s led some economists to revise their recession forecasts. Goldman Sachs Group Inc. now sees only a 15% chance of a downturn.
The shift to a positive outlook, however, underestimates the strain on the lower end of the US middle class, Jones said. His company saw a surge of demand from consumers eager for their tax refunds, particularly among people in the $40,000 income range. Trouble is, those refunds were smaller this year, so households didn’t get as much relief as they wanted, he said.
While people speak broadly about the middle class remaining resilient, “there’s no one middle class anymore,” Jones said.
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