Most Americans could cover emergency expenses in the fall

Americans are nervously struggling with soaring gasoline prices and inflation, a plummeting stock market and soaring interest rates.

But they were doing pretty well last fall.

Seventy-eight percent of households said they were “doing well” financially or “living comfortably,” according to the Federal Reserve’s “Economic Well-Being of US Households in 2021” report. part in the history of the survey, which the Fed has been conducting since 2013.

The survey was carried out last October and November before the omicron of COVID-19 triggered a spike in cases and Russia launched a war against Ukraine, intensifying chain bottlenecks. supply and pushing gasoline prices and already rising inflation.

Sixty-eight percent of adults said they could cover an emergency expense using only cash or its equivalent, up from 64% in 2020 and the highest share on record. The share has steadily increased, rising from 50% in 2013.

Parents, in particular, saw big gains, with around three-quarters saying they were doing well financially, up eight percentage points from 2020.

Americans’ perception of their financial health is more positive than their view of the economy. Forty-eight percent rated their local economy as “good” or “excellent,” up from 43% in 2020, but below the 63% who held that belief in 2019, before the pandemic.

Last year, Americans enjoyed a buoyant labor market with record job openings and surging wages. Indeed, many people were still on the sidelines due to COVID concerns, childcare duties or other reasons, causing widespread worker shortages.

Many households also still had cash left over from government stimulus checks and other aid.

Those positive dynamics are still in play, but inflation has spiked, spurring aggressive Fed rate hikes and market selling. Some top economists think a recession is likely within 12 months.

And many low- and moderate-income households were still struggling financially. Fifteen percent of adults with incomes under $50,000 struggle to pay their bills due to varying monthly incomes. And 8% of tenants were late with their payments last fall while 17% were late at some point last year, more than before the health crisis.

Still, the generally strong household finances captured in the Fed’s survey could help keep consumer spending steady and stave off a slowdown or ensure the recession is moderate, says Mark Zandi, chief economist at Moody’s Analytics.

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Other survey results:►

► 15% of workers said they had held a different job than in the previous 12 months. Just over six in 10 said the new job was better overall, while one in 10 said it was worse.

► 7% of adults aged 25-54 said they were not working and COVID-related concerns were at least part of it.

► 77% of employees said their company is taking the right precautions against COVID-19.

► Nearly a quarter of homeowners with a mortgage refinanced it last year, including three in 10 with an income over $100,000 and 16% of those with an income under $50,000.

► 93% of parents with a child in school said their youngest child in K-12 took lessons entirely in person, up from 27% in 2020.

► 12% of student borrowers were in arrears, compared to 17% in fall 2019.

► 40% of people who were still working believed their retirement nest egg was on track, up from 36% in 2020 and 37% in 2019.

► 25% of adults who retired in the past 12 months and 15% of those who retired two years ago said the effects of COVID-19 contributed to the timing of their decisions.

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