WASHIGTON–The financial well-being of U.S. households in 2023 was nearly unchanged from 2022 as “higher prices remained a challenge for most households and workers continued to benefit from a strong labor market,” according to a new report from the Federal Reserve.
The Fed’s 2023 “Economic Well-Being of U.S. Households” examines the financial circumstances of U.S. adults and their families.
It draws from the Board's eleventh annual Survey of Household Economics and Decisionmaking (SHED), which was fielded in October 2023.
The Fed said the report analyzes topics including financial well-being, income, employment, expenses, banking and credit, housing, higher education and student loans, and retirement and investments.
The Findings
According to the Fed, the report found:
- During 2023, 72% of adults reported either doing “OK or living comfortably financially,” similar to the 73% seen in 2022 but down six percentage points from the recent high of 78% in 2021.
- Despite the moderating pace of inflation, higher prices continued to be a top financial concern, the Fed said, with 65% of adults saying that changes in the prices they paid compared with the prior year had made their financial situation worse, including 19% who said price changes made their financial situation much worse.
- Some groups continued to experience financial stress at higher rates than others. In particular, low-income adults were more likely to face material hardships, including not paying all bills in full, sometimes or often not having enough to eat, and skipping medical care because of cost. Seventeen percent of adults said they did not pay all their bills in full in the month prior to the survey.
- Measures of financial resiliency, including preparedness for emergency expenses and monthly saving, were consistent with the 2022 report. As in the prior year, 63% of adults said they would cover a $400 emergency expense using cash or its equivalent and 13% would be unable to pay the expense by any means, the Fed report found.
- 48% of adults said that they had money left over after paying their expenses in the month prior to the survey, similar to 2022 but below 2021 and pre-pandemic levels.
Additional Findings
The Fed report further found:
- Indicators of workers' opportunities for new positions and pay increases were also similar to 2022. The share of adults who received a raise and asked for a raise remained unchanged from 2022 at 33% and 13%, respectively. “Reflecting the continued strength of the labor market, these measures remained above their 2021 levels,” the Fed said.
- The Fed said this year's report also discusses topics new to the survey including homeowners' insurance, caring for aging or disabled adults, and childcare. For example, childcare was reported as a significant cost in family budgets. Parents using paid childcare typically spent 50% to 70% as much per month on childcare as they did on their housing payment, which is most people's single largest monthly expense.
Additional information is available here.
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