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The many costs of childcare
Childcare costs are rising faster than overall inflation, straining family budgets and possibly prompting workforce exits.
October 2025
Key takeaways
- U.S. childcare costs are rising 1.5 times faster than overall inflation, up 5.2% year-over-year (YoY) in September. This could be why the number of households making monthly childcare payments has declined, with the year-over-year percent increase in the number of households paying for childcare down 1.6% YoY September, despite the average monthly payment up 3.6% YoY, according to Bank of America payments data.
- Regional disparities in childcare costs are widening. While the national average monthly childcare payment rose, some areas saw sharper increases ─ New England was up 6.6% and the West North Central division surged 8.2% YoY as of September. In the South, Nashville led major cities with a more than 6% increase from 2024 averages.
- These spiraling costs mean some parents, especially women, are quitting work or cutting their hours to become caregivers. Indeed Bank of America data shows a drop in households receiving multiple paychecks while making childcare payments, especially among lower-income households, which suggests to us an increasing trend of some earners dropping out of the labor force to take on childcare responsibilities.
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