Even as price pressures ease, U.S. households will continue to feel the pinch of inflation in the second half of 2023, the Federal Reserve said Tuesday, with most Americans feeling the pinch of inflation in the second half of 2023. Although their financial situation has changed little over the past year, parents report that the situation has become more difficult.
As of October 2023, about 72% of adults were at least financially okay. Fed Annual Survey It showed about household economics and decision making.
This was down from 78% in 2021 and the lowest percentage since 2016, but little changed from 73% in 2022. The percentage of parents who are at least OK financially fell five percentage points to 64%, the lowest level since data collection began in 2015. .
Inflation remains the biggest financial concern, according to the report. Despite consumer inflation falling sharply from around 9% in June 2022 to less than 4% at the time of the survey, 65% of adults said higher prices had made their situation worse. Additionally, 34% said their family’s monthly income increased in the past year, while 38% said their expenses also increased.
About 63% of adults say they would be able to cover a $400 emergency expense with cash or an equivalent amount, the same as in 2022 but down from a record high of 68% in 2021.
Covering the cost of a rental home was a bigger challenge last year than in previous years, with 19% of renters saying they fell behind on rent at some point last year, up from 17% in 2022.
Rent prices, which turned out to be one reason why inflation hasn’t eased as much as Fed policymakers had hoped, far exceeded overall inflation, with median monthly rents rising 10% to $1,100 The study said.
The survey included responses from 11,000 people. It was conducted in October 2023.
