For Americans, 2021 provided the healthiest finances of eight years | WGN Radio 720

Washington (AP) — The Federal Reserve Board said Americans’ financial position reached its highest level in nearly a decade last year, stimulated by a strong job market and government funding.

According to an annual survey by the Federal Reserve Board, nearly eight in ten adults said they were “ok or comfortable living” last fall when it comes to their 2021 finances.

A survey of 11,000 adults was conducted last October and November when inflation exceeded 6% year-on-year, before Russia’s invasion of Ukraine drastically boosted gas and food prices. .. The Federal Reserve did not ask specific questions about how inflation is affecting the financial situation of Americans.

The study was also conducted in late 2021 before the giant Omicron wave of COVID cases, and some Americans withdrew travel and other spending.

Inflation-adjusted consumer spending continues to rise despite inflation at high levels of nearly 40 years, so the financial position captured by the report explains consumer resilience in the face of rising prices. Useful for.

The report showed that members of all racial groups reported healthier finances, Hispanics showed the sharpest improvement, and whites were the smallest.

Nearly seven out of ten said they could pay an unexpected $ 400 in cash or equivalent. This is the highest amount since 2013. Still, 11% say they can’t pay at all.

People with children also reported a sharp increase in financial well-being, with three-quarters increasing 8 percentage points from 2020 before the pandemic and 4 points from 2019, economically “at least okay”. I said there is.

According to the Federal Reserve, the increase in parents is likely to reflect the reopening of schools, allowing more parents to work and reduce childcare costs. The expansion of child tax credits included in President Joe Biden’s $ 1.9 trillion financial bailout package is also probably a key factor, Fed officials said.

Low-income parents reported the greatest increase in their financial health. With revenues less than $ 25,000, at least the percentage of respondents who said they were okay jumped from 40% to 53%.

The extended child tax credit included a monthly payment of up to $ 300 per child to most parents. High-income parents said they mainly saved money, and for parents with less than $ 50,000, 3 out of 10 said they spent most of their homes and 15% said they spent most of their food. rice field.

For the first time, the Federal Reserve asked about cryptocurrencies in a survey. It turns out that 12% of Americans have held the crypto in the last 12 months, but only 3% have used it in financial transactions. The Federal Reserve said 2% used it to make payments and 1% used cryptography to send money to someone.

For Americans, 2021 provided the healthiest finances of eight years | WGN Radio 720

Source link For Americans, 2021 provided the healthiest finances of eight years | WGN Radio 720

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