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Federal Reserve Board – Federal Reserve Board Issues Report on the Economic Well-Being of U.S. Households in 2023
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The Federal Reserve Board on Tuesday issued its 2023 Economic Well-Being of U.S. Families report, which examines the financial circumstances of U.S. adults and their families. Overall, the report shows that financial well-being has remained almost unchanged since 2022, as higher prices continued to be a challenge for most families and workers continued to benefit from a strong labor market.
The report is based on the Council’s eleventh annual Survey of Home Economics and Decision Making (SHED), which was conducted in October 2023. It analyzes topics including financial well-being, income, employment, expenses, banking and credit, housing, higher education and student loans, and retirement and investments.
The report indicates that overall financial well-being has remained nearly unchanged since 2022. During 2023, 72 percent of adults reported being well off or living comfortably financially, similar to the 73 percent seen in 2022, but down 6 percentage points from the recent high of 78. percent in 2021. Despite the moderate pace of inflation, higher prices continued to be a major financial concern. Sixty-five percent of adults said changes in the prices they paid compared to the previous year made their financial situation worse, including 19 percent who said price changes made their financial situation much worse.
Some groups continued to experience financial difficulties 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 missing medical care due to costs. Seventeen percent of adults said they did not pay all their bills in full in the month before the survey.
“SHED provides valuable information about the financial conditions of American families,” said Federal Reserve Board Governor Michelle W. Bowman. “This perspective continues to help the Federal Reserve better understand how families are coping with the ongoing economic challenges they face.”
Financial resilience measures, including preparing for emergency expenses and monthly savings, were consistent with the 2022 report. As in the previous year, 63 percent of adults said they would cover a $400 emergency expense with cash or cash equivalent and 13 percent would not be able to pay the expense by any means. Forty-eight percent of adults said they had money left over after paying their expenses in the month before the survey, similar to 2022 but below 2021 and pre-pandemic levels.
Indicators of worker opportunities for new positions and salary increases were also similar to those in 2022. The percentage of adults who received a raise and asked for a raise remained unchanged from 2022, at 33 percent and 13 percent, respectively. Reflecting continued labor market strength, these measures remained above 2021 levels.
This year’s report also discusses topics new to the survey, including home insurance, care for elderly or disabled adults, and child care. For example, child care was reported as a significant cost in family budgets. Parents who use paid child care typically spend 50 to 70 percent per month on child care than they do on housing payments, which is most people’s biggest monthly expense.
The report, fact sheet, downloadable data, data visualizations, and a video summarizing the report’s findings are available here.
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