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Natural disasters will hit the finances of 1 in 5 US adults in 2023: Fed
The Fed said 19 percent of adults reported being financially affected by natural disasters or severe weather events, such as floods, in the past 12 months. (Kyle Grillot)
Nearly 20 percent of adults in the United States were financially affected by natural disasters last year, the Federal Reserve said Tuesday, marking a nearly 50 percent increase from 2022.
The Fed’s annual report on the economic well-being of U.S. households found that 19 percent of adults reported being financially affected by natural disasters or severe weather events, such as floods and wildfires, in the past 12 months.
This figure is up sharply from 13 percent in 2022, with some of the biggest changes seen in the west of the country, where the percentage of people noticing a financial impact from natural disasters has nearly doubled.
In the US South, which includes hurricane-prone states like Florida, nearly a quarter of all respondents said they had been financially hit by natural disasters, while just 13% did so in the Northeast.
In its report, the Fed noted that some of the people most at risk from natural disasters were also least likely to have homeowners insurance.
“Homeowners with lower incomes, those living in the South and homeowners who had already been financially affected by a natural disaster were all less likely to have homeowners insurance,” the report concluded.
The number of American adults who reported being at least financially well off remained relatively unchanged at 72% in 2023, the Fed said.
But the number masked an important change: Parents living with children under 18 saw a five percentage point decline from the previous year, with just 64 percent saying they were at least financially well off.
The report also highlighted child care as a “substantial portion of the family budget for parents using paid child care,” typically costing 50-70 percent of what parents spend each month on housing.
Inflation continued to be Americans’ top financial concern in 2023, the Fed said, despite a sharp decline in the inflation rate starting in 2022, when it reached a multi-decade high.
More than a third of Americans reported inflation as a financial challenge, with many respondents citing the cost of food and groceries.
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