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The Fed Issues 2023 Economic Well-Being of US Households Report

Higher prices remained a challenge for households in 2023, similar to 2022, while workers benefited from a strong labor market, according to a Federal Reserve report released last week.

The Fed’s “Economic Well-Being of U.S. Households in 2023” revealed that overall financial well-being was nearly unchanged from the previous year. Key findings include:

  • 72% of adults reported being financially okay or comfortable, compared to 73% in 2022 and down from 78% in 2021.
  • 65% said higher prices worsened their financial situation, with 19% stating it made their situation much worse.
  • Low-income adults faced higher rates of financial stress, such as unpaid bills, insufficient food, and skipped medical care due to cost.
  • 17% did not pay all their bills in the month prior to the survey.

The report, based on the annual Survey of Household Economics and Decisionmaking (SHED) from October, covered financial well-being, income, employment, expenses, banking, credit, housing, education, and retirement.

Financial resiliency, including emergency preparedness and monthly savings, remained consistent with 2022. About 63% could cover a $400 emergency expense with cash, while 13% could not. Additionally, 48% had money left over after expenses, similar to 2022 but below 2021 and pre-pandemic levels.

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