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High inflation made finances worse for 65% of Americans in 2023
By Alicia Wallace, CNN
(CNN) – Inflation may have slowed last year, but it continued to deal hard blows—some devastating—to Americans’ livelihoods: Nearly two-thirds of U.S. families were worse off because of it, and about 1 in 6 adults did not. was able to pay all of his monthly payments. accounts, new data from the Federal Reserve shows.
The Fed on Tuesday released its U.S. Household Economic Well-Being Report for 2023, examining the financial lives of U.S. adults and their families. The report found that 72% of adults surveyed said they were “fine” financially, reaching a similar reading to 2022 but falling well below the 78% high reached in 2021.
Inflation “worsened” the financial lives of 65% of US families, according to the report. Among them, 19% said it was “much worse”.
The findings were drawn from the Fed’s 11th Annual Survey of Home Economics and Decision Making, which analyzes the economic health of Americans in a variety of areas, including employment, income, banking and credit services, housing, retirement planning, student loans , childcare and even shopping. Now, pay later.
But even at a time when comprehensive economic data highlights a remarkably resilient economy – job growth has been excellent and wage gains have been strong, which has helped fuel spending and keep the economy moving – not everyone feels so optimists. More than three years of high inflation affected Americans’ wallets and psycheS.
This was especially true in 2022 when inflation in the U.S. reached 9.1%, its highest annual rate in more than 40 years.
Incomes grew healthily in 2023, but so did spending, the Fed report showed. Monthly budgets remained tight and more than half of adults had no money left after paying expenses.
This was especially true for low-income adults, who reported higher instances of not having enough to eat, not being able to pay their bills in full, and missing out on medical care.
Overall, 17% of adults reported that they were unable to pay all of their bills in full in the month before the survey, which was conducted in October 2023.
“O [Survey of Household Economics and Decisionmaking] provides valuable information about the financial conditions of American families,” Fed Governor Michelle Bowman said in a statement accompanying the report. “This perspective continues to help the Federal Reserve better understand how families are coping with the ongoing economic challenges they face.”
The report showed an improvement in people’s feelings about the local economy – with 42% saying it was “good” or “excellent”, compared to 38% the previous year. However, that percentage is a far cry from how people felt before the pandemic: In 2019, 63% felt their local economy was in good or excellent health.
Looking at the national economy, the story is similar: people’s perceptions have improved compared to 2022 (22% last year, up from 18%), but remain well below the 50% percentage achieved in 2019.
Tuesday’s report showed similar financial resilience measures to those reported in 2022, with 63% of adults saying they would be able to cover a $400 emergency expense with cash on hand.
This story is developing and will be updated.
O-CNN-Wire
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