Childcare has become so expensive that many families have given up looking for affordable options and are providing the service themselves, forcing them to make tough financial and personal sacrifices.
While consumer prices overall have cooled off sharply from 40-year highs in 2022, childcare costs have not and were up 5.2% year over year in September—more than 1.5 times the total inflation rate, according to a note from Bank of America Institute last week.
That could be why fewer families are paying for childcare. Drawing on the bank’s payments data, BofA found a 1.6% annual decline in the number of households making monthly payments in September, breaking a trend of increases, while the amount of the average monthly payment rose 3.6%.
After steadily increasing over the past four years, the cost of day care for one child now exceeds one month’s rent for many families, the note added, citing Labor Department data.
The ongoing government shutdown could make the situation worse, by threatening early childhood Head Start programs for lower-income families.
