Fed Consumer Survey: Are You Worse Off Than a Year Ago?

Tyler Mitchell By Tyler Mitchell Jun13,2024 #finance

Let’s check out some charts from the latest fed survey on how well people are doing financially. This data and a new chart by me tie everything I have said about the rent and the election together.

Data from Fed Economic Survey, Chart by Mish

Economic Well-Being

Please consider the Federal Reserve Board Economic Well-Being of U.S. Households in 2023 Report.

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.

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.

Are You Worse Off Financially Than a Year Ago?

Between 2022 and 2023 the numbers improved (lead chart). However, the numbers are a disaster compared to the peak in 2019.

  • Over 60: In 2019, 11 percent said they were financially worse off. In 2023, 29 percent said they were financially worse off. That’s a rise of 18 percentage points.
  • Over 45-59: In 2019, 15 percent said they were financially worse off. In 2023, 35 percent said they were financially worse off. That’s a rise of 20 percentage points.
  • Over 30-44: In 2019, 15 percent said they were financially worse off. In 2023, 32 percent said they were financially worse off. That’s a rise of 17 percentage points.
  • Over 18-29: In 2019, 15 percent said they were financially worse off. In 2023, 29 percent said they were financially worse off. That’s a rise of 14 percentage points.

Are You Doing OK Financially?

Doing OK Financially 2021 vs 2023 Details

  • Over 60: In 2021, 84 percent said they were financially OK. In 2023, 82 percent said they were financially OK. That’s a drop of 2 percentage points.
  • 45-59: In 2021, 77 percent said they were financially OK. In 2023, 72 percent said they were financially OK. That’s a drop of 5 percentage points.
  • 30-44: In 2021, 75 percent said they were financially OK. In 2023, 66 percent said they were financially OK. That’s a drop of 9 percentage points.
  • 18-29: In 2021, 74 percent said they were financially OK. In 2023, 66 percent said they were financially OK. That’s a drop of 8 percentage points.

Millennials and Zoomers are doing much worse than Gen X and Boomers.

Can You Handle a $400 Emergency?

Handle a $400 Emergency 2021 vs 2023 Details

  • Over 60: In 2021, 79 percent said they could handle a $400 expense with cash. In 2023, 77 percent said the same thing. That’s a drop of 2 percentage points.
  • 45-59: In 2021, 67 percent said they could handle a $400 expense with cash. In 2023, 64 percent said the same thing. That’s a drop of 3 percentage points.
  • 30-44: In 2021, 63 percent said they could handle a $400 expense with cash. In 2023, 55 percent said said the same thing. That’s a drop of 8 percentage points.
  • 18-29: In 2021, 58 percent said they could handle a $400 expense with cash. In 2023, 52 percent said the same thing. That’s a drop of 6percentage points.

77 percent of age group 60+ can handle an emergency $400 expense with cash. Only 52 percent of those age 18 to 29 can.

Do You Have 3 Months Emergency Savings?

Emergency Savings 2021 vs 2023 Details

  • Over 60: In 2021, 73 percent said they had 3 months of emergency savings. In 2023, 69 percent said the same thing. That’s a drop of 4 percentage points.
  • 45-59: In 2021, 58 percent said they had 3 months of emergency savings. In 2023, 54 percent said the same thing. That’s a drop of 4 percentage points.
  • 30-44: In 2021, 54 percent said they had 3 months of emergency savings. In 2023, 47 percent said said the same thing. That’s a drop of 7 percentage points.
  • 18-29: In 2021, 46 percent said they had 3 months of emergency savings. In 2023, 39 percent said the same thing. That’s a drop of 7 percentage points.

73 percent of age group 60+ have 3 months of emergency savings. Only 39 percent of those age 18 to 29 do.

Pandemic Savings Wiped Out

The last three chars say the same thing, very loudly: All of the savings from three rounds of pandemic stimulus, rent abatements, and student debt cancellations have been wiped out by rising inflation.

Biden keeps telling people they are better of. Some are but over 30 percent of respondents say they are worse off.

Economists and Biden still don’t get what’s happening. That’s because Biden does not believe the obvious and none of these surveys ask the right questions.

Two Key Questions Not Asked

  • Do you own a house or do you rent?
  • If you own a house, did you refinance at a lower rate?

People who own their own home and were able to significantly lower their mortgage rate are generally better off.

Those who rent and want to but have watched rent and home prices soar out of sight.

Home Prices Hit New Record High

The Case-Shiller national home price index hit a new high in February. That’s the latest data. Economists don’t count this as inflation.

Case-Shiller national and 10-city indexes via St. Louis Fed, OER, CPI, and Rent from the BLS

On May 2, I commented Home Prices Hit New Record High, Don’t Worry, It’s Not Inflation

Not Inflation?!

Economists, including the Fed, consider homes a capital expense, not a consumer expense.

As a result, they all ignore economic bubbles and blatantly obvious inflation on grounds it’s not consumer inflation. This has gotten the Fed into trouble at least three times. The first was the dot-com bubble, then the Great Recession housing bubble and now.

It’s really pathetic when you make the same major mistake over and over and over. It’s a result of groupthink.

They all believe in the same silly models based on disproved theories including inflation expectations and the Phillips curve. You do not get in the good ole boys Fed club unless you think like a good ole boy.

CPI Up 0.3 Percent With Rent Still Rising Steeply

Rent rose another 0.4 percent in April. Food and beverages were flat with food at home declining but food away from home rising.

CPI data from the BLS, chart by Mish

On May 15, I noted CPI Up 0.3 Percent With Rent Still Rising Steeply, Food a Bright Spot

Yet Another Groundhog Day for Rent

Rent of primary residence, the cost that best equates to the rent people pay, jumped another 0.4 percent in March.  Rent of primary residence has gone up at least 0.4 percent for 32 consecutive months! 

Rent vs Wages

I created a new chart today to see if it could explain why “You Doing OK Financially” peaked at the end of 2021.

BLS data, chart by Mish

From 2018 until 2022 the gap between rent and wages tightened. Starting January 2022 rent rose more than wages.

Meanwhile, cost of a mortgage rose from about 3 percent to over 7 percent in the same timeframe while the cost of a home increased too.

People Who Rent Will Decide the 2024 Presidential Election

I have been discussing rent and the election since January, and put all the pieces together in my April 20 post: People Who Rent Will Decide the 2024 Presidential Election

Q: What is it that young voters really have on their minds?
A: Rent

Who Are the Renters?

The answer is younger voters and blacks.

The Apartment List 2023 Millennial Homeownership Report shows Millennial homeownership seriously lags other generations.

Generation Z homeownership is dramatically lower still.

And according to the National Association of Realtors, the homeownership rate among Black Americans is 44 percent whereas for White Americans it’s 72.7 percent.

That’s the largest Black-White homeownership rate gap in a decade.

The pollsters are not asking the right questions.

Roughly 36 percent of households rent. 31 percent say they are worse off financially. These two idea are related. The chart of rent vs hourly wages ties things together nicely.

But hey, Biden tells everyone they are doing better and mainstream media laps it up.

Tyler Mitchell

By Tyler Mitchell

Tyler is a renowned journalist with years of experience covering a wide range of topics including politics, entertainment, and technology. His insightful analysis and compelling storytelling have made him a trusted source for breaking news and expert commentary.

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One thought on “Fed Consumer Survey: Are You Worse Off Than a Year Ago?”
  1. Do you think the decrease in reported financial well-being is directly tied to the increase in prices? How do you foresee this trend evolving in the coming year?

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