Federal Reserve Survey: Most Americans' Financial Situation Stable, Household Emergency Capacity Has Not Significantly Deteriorated
The latest survey from the Federal Reserve shows that as of October 2024, most American adults have stable financial conditions, with 73% stating that life is "okay or comfortable." The ability to cope with unexpected expenses has not significantly deteriorated, with 63% of respondents able to pay for emergency costs in cash. Although economic confidence has slightly improved, only 29% believe the economy is "good," and inflation continues to trouble households, particularly with rising food and housing prices. Confidence in changing jobs has weakened, with 62% believing a new job is "overall better."
According to the latest annual survey released by the Federal Reserve, as of October 2024, most American adults are financially stable, and their pessimism about the economy has slightly eased. However, overall economic confidence has not yet returned to pre-pandemic levels.
The study, titled "Survey of Household Economics and Decisionmaking" (SHED), covers over 12,000 American adults. The survey shows that about 73% of adults report being "doing okay or living comfortably" financially, which is not much different from 72% in 2023, but still below the peak of 78% during the pandemic in 2021 when the government provided substantial financial assistance.
In terms of handling unexpected expenses, such as emergency medical costs or car repairs, 63% of respondents indicated they could pay in cash or equivalent means, a figure that has remained stable in recent years, reflecting that households' emergency capabilities have not significantly deteriorated.
Although views on the economy have improved compared to the previous year, overall sentiment remains pessimistic. Only 29% of adults believe the U.S. economy is "good" or "very good," which, although higher than 22% in 2023, is far below the 50% level seen before the pandemic in 2019.
Another positive note is that the proportion of those who feel their economic situation is "worse" than a year ago has decreased to 29%, down from a record 35% in 2022, but still higher than pre-pandemic levels.
Inflation remains a concern for American households, particularly with rising food and daily necessities prices. Most people report that price changes have worsened their financial situation, although this proportion has decreased compared to 2023, indicating a slight easing of inflationary pressures.
Housing issues remain prominent. Since 2022, the median rent in the U.S. has increased by about 10% annually, putting more people in the "unable to afford rent" predicament, especially in major urban areas.
The labor market remains robust, with the proportion of people starting new jobs in 2024 being roughly the same as in 2023, and the rates of layoffs or voluntary resignations have not shown significant changes.
However, confidence in changing jobs has weakened. Among those who changed jobs in the past year, only 62% believe their "new job is overall better," down from 72% in 2022.
The report also notes that the default rate on "Buy Now, Pay Later" services has surged in 2024. Nearly a quarter of users have experienced late payments, a significant increase from 18% in 2023
