The Federal Reserve Board on Tuesday issued its Economic Well-Being of U.S. Households in 2023 report, which examines the financial circumstances of U.S. adults and their families. Overall, the report shows that financial well-being was nearly unchanged from 2022 as higher prices remained a challenge for most households and workers continued to benefit from a strong labor market.
The report draws from the Board’s eleventh annual Survey of Household Economics and Decisionmaking (SHED), which was fielded in October 2023. It analyzes topics including financial well-being, income, employment, expenses, banking and credit, housing, higher education and student loans, and retirement and investments.
The report indicates that overall financial well-being was nearly unchanged from 2022. During 2023, 72 percent of adults reported either doing okay or living comfortably financially, similar to the 73 percent seen in 2022 but down 6 percentage points from the recent high of 78 percent in 2021. Despite the moderating pace of inflation, higher prices continued to be a top financial concern. Sixty-five percent of adults said that changes in the prices they paid compared with the prior year had made their financial situation worse, including 19 percent who said price changes made their financial situation much worse.
Some groups continued to experience financial stress at higher rates than others. In particular, low-income adults were more likely to face material hardships, including not paying all bills in full, sometimes or often not having enough to eat, and skipping medical care because of cost. Seventeen percent of adults said they did not pay all their bills in full in the month prior to the survey.
“The SHED provides valuable insight into the financial conditions of American households,” said Federal Reserve Board Governor Michelle W. Bowman. “This perspective continues to help the Federal Reserve better understand how families are coping with the ongoing economic challenges they face.”
Measures of financial resiliency, including preparedness for emergency expenses and monthly saving, were consistent with the 2022 report. As in the prior year, 63 percent of adults said they would cover a $400 emergency expense using cash or its equivalent and 13 percent would be unable to pay the expense by any means. Forty-eight percent of adults said that they had money left over after paying their expenses in the month prior to the survey, similar to 2022 but below 2021 and pre-pandemic levels.
Indicators of workers’ opportunities for new positions and pay increases were also similar to 2022. The share of adults who received a raise and asked for a raise remained unchanged from 2022 at 33 percent and 13 percent, respectively. Reflecting the continued strength of the labor market, these measures remained above their 2021 levels.
This year’s report also discusses topics new to the survey including homeowners’ insurance, caring for aging or disabled adults, and childcare. For example, childcare was reported as a significant cost in family budgets. Parents using paid childcare typically spent 50 to 70 percent as much per month on childcare as they did on their housing payment, which is most people’s single largest monthly expense.
The report, fact sheet, downloadable data, data visualizations, and a video summarizing the report’s findings are available here.
For media inquiries, please email [email protected] or call (202) 452-2955.