May 22 (Reuters) – A still-high wave of inflation, which hit a 40-year high last year, has eroded U.S. households’ economic security, prompting many to save to make ends meet. is declining, the Federal Reserve said on Monday. , the sense of security after retirement faded, so they delayed purchases or replaced them with cheaper products when shopping.
In its annual survey showing the negative impact of inflation on Americans’ economic confidence, the Fed said the percentage of respondents who said they were “at least okay financially” in 2022 fell 5 percentage points, the highest since the survey began. announced that it was 10 years ago – to 73%. It hit a record high last year.
The share of people who say their living conditions are worsening rose 15 percentage points to 35%, the highest level ever since the Fed first started asking the question in 2014. In 2013, the Fed launched the Household Economics and Decision-Making Study.
The percentage of people who think their retirement savings are “on track” has dropped to 31% among those who haven’t retired yet, down from 40% in 2021.
With the 2024 presidential election already in its early stages, the survey also suggests that Americans’ grim mood over their own finances has carried over into their views on the national economy.
Despite the low unemployment rate of less than 4% since January 2022, only 18% of respondents rate the domestic economy as ‘good’ or ‘excellent’, compared to 50% in 2019. declined from
Inflation is a big concern
The survey was conducted in October and the results included responses from a representative sample of 11,775 people.
Inflation has emerged as a major risk for the US in 2021 as the economy reopens from pandemic-era restrictions imposed on many public and commercial activities the previous year.
Annual inflation, as measured by the consumer price index, peaked at 9.1% last summer, the highest since the early 1980s and remains high at 4.9%. Fed officials have responded by raising interest rates aggressively and repeatedly pledging their determination to curb inflation by doing whatever it takes.
Fifty-four percent of adults say their households have been ‘largely’ affected by price increases, with parents of children under 18 most likely to report the impact of inflation, blacks and Latin Americans adult, disabled.
In fact, one-third of all households cite inflation as their main economic challenge, more than four times higher than in 2016.
The question, which was designed to gauge a household’s ability to survive a minor financial emergency, asked for cash or its equivalent for an unexpected $400 expense (a credit card expected to be fully repaid in the next financial year). etc.). Sixty-three percent said they would use cash for these expenses, down from a record high of 68 percent in 2021.
Meanwhile, a survey that measured household income and respondents’ perception of the job market showed that more adults received or asked for raises and promotions than last year.
Reported by Dan Burns.Editing: Andrea Ricci
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