The Federal Reserve Board on Monday issued its Economic Well-Being of U.S. Households in 2022 report, which examines the financial lives of U.S. adults and their families. Overall, the report shows that higher prices have negatively affected most households and overall financial well-being declined over the prior year, though workers continued to benefit from a strong labor market.
The report draws from the Board’s tenth annual Survey of Household Economics and Decisionmaking, or SHED, which was conducted in October of last year. The report discusses findings related to financial well-being, income, expenses, employment, banking and credit, housing, retirement and investments, and higher education and student loans. The report, fact sheet, downloadable data, data visualizations, and a video summarizing the survey’s findings are found here.
The report indicates that self-reported financial well-being declined in 2022, in part reflecting ongoing concerns about higher prices. In the fourth quarter of 2022, 73 percent of adults reported either doing okay or living comfortably financially, down 5 percentage points from the previous year and among the lowest levels observed since 2016.
Consistent with these changes in overall financial well-being, fewer adults reported having money left over after paying their expenses. Fifty-four percent of adults said that their budgets had been affected “a lot” by price increases. Parents living with children under age 18, Black adults, Hispanic adults, and those with a disability were more likely to say that their budgets had been affected “a lot” by higher prices.
“The SHED results provide helpful insights into the economic well-being of Americans,” said Federal Reserve Board Governor Michelle W. Bowman. “It is important that we continue to refine our understanding of the economic challenges facing U.S. households.”
The report also provides details on how people adjusted their financial behaviors in response to higher prices. Common strategies were using less of a product or stopping using it altogether, switching to a cheaper product; or delaying a major purchase. Fifty-one percent of adults reported that they reduced their savings in response to higher prices.
Indicators of workers’ opportunities for new positions and pay increases strengthened relative to 2021. The share who received a raise, asked for a raise, or voluntarily left a job increased over the prior year, while the share who lost a job decreased. For example, thirty-three percent of adults said they received a raise or promotion in the prior year, up 3 percentage points from 2021.
Additionally, the share of adults who reported that they would cover a $400 emergency expense using cash or its equivalent was 63 percent. This was down 5 percentage points from a high in 2021. Thirteen percent of adults said they would be unable to pay the expense by any method, which was slightly higher than in the last survey.
The survey included more than 11,000 adult respondents.
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