In its "Economic Well-Being of U.S. Households in 2022” report, the Federal Reserve Board is shining a light on the impact of higher prices on American households, peeling back the covers on economic challenges faced in American households.
According to a Federal Reserve Board news release, the report, which included 11,000 participants and offered a detailed portrait of U.S. household finances, pointed out financial well-being slid year-over-year, and workers benefitted from a strong labor market. The report noted that 73% of adult respondents said they had financial well-being, down five points from the previous year.
"The SHED results provide helpful insights into the economic well-being of Americans," Federal Reserve Board Governor Michelle W. Bowman said in the news release.
According to the Federal Reserve’s news release, the report also offered some positive indicatoes, including an increase in raises and job opportunities. However, the release noted the report also fond a drop in emergency expense coverage.
A prime finding noted in the report, according to the news release, found that fewer adults said they had money left over after paying their expenses, with 54% stating price increases had an adverse impact on their budget. The impact also hit parents with children under the age of 18 particularly hard, according to the release, along with Hispanic adults, Black adults and individuals with disabilities.
Moreover, the result also examines how people changed up their financial habits as inflation took more of their incomes, according to the news release, taking steps that included cutting consumption, selecting cheaper alternatives or delaying key purchases.
The Federal Reserve’s news release also noted the report also found that amid inflation, 51% of results said they were saving less, according to the release, while year-over-year more people received raises, sought raises or quit their jobs voluntarily and there were fewer job losses. The report, according to the news release, noted only 33% of respondents said they received a pay increase during the previous year, up 3% from 2021.