US households continued to feel pinched by inflation in late 2023 even as price pressures ebbed, the Federal Reserve reported on Tuesday, with most Americans saying their financial situation had changed little in the last year, while parents reported times had gotten harder.
About 72% of adults were doing at least OK financially as of October 2023, the Fed’s annual survey on household economics and decision-making showed.
That was down from 78% in 2021 and the lowest rate since 2016, though little changed from 73% in 2022. The share of parents doing at least OK financially dropped 5 percentage points to 64%, the lowest level since 2015 when data collection began.
Inflation remained the top financial concern, the report said. Sixty-five percent of adults said high prices had made their situations worse, even though consumer inflation fell sharply from around 9% in June 2022 to below 4% by the time the survey was taken. And while 34% said their family’s monthly income had risen in the past year, 38% said their spending had also increased.
Some 63% percent of adults said they could cover a hypothetical $400 emergency expense using cash or its equivalent, the same as in 2022 but down from a record high of 68% in 2021.
Covering rental housing costs was a greater challenge last year than in the year before, with 19% of renters saying they had been behind in the rent at some point in the prior year, up from 17% in 2022.
Rental costs, which have proven to be among the reasons inflation has not eased as much as Fed policymakers had hoped, were up far more than inflation overall, with the median monthly rent rising 10% to $1,100, the survey said.
The survey included responses from 11,000 people. It was conducted in October of 2023.
