A record percentage of American adults said they were in solid financial shape at the end of last year even as surging inflation dented household budgets, according to a Federal Reserve survey released Monday.
Seventy-eight percent of U.S. adults said they were either doing “OK” financially or “living comfortably” in the final three months of 2021, according to the Fed’s Survey of Household Economics and Decisionmaking (SHED), an annual poll of how U.S. adults are faring economically.
The 2021 survey marked the highest percentage of Americans reporting financial security since the Fed began conducting the SHED in 2013. The number of Americans who were doing at least OK financially rose from 75 percent in 2020, where it had plateaued since 2018.
“The SHED results provide valuable insight into Americans’ financial conditions during the late fall of 2021. This important perspective helps the Federal Reserve better understand the economic challenges that existed during that phase of the pandemic recovery,” said Fed Governor Michelle W. Bowman in a Monday statement.
Despite annual inflation hitting four-decade highs and consumer confidence falling steadily throughout last year, household financial health improved on the whole after the onset of the coronavirus pandemic in 2020.
The number of adults doing worse off than 12 months ago dropped from 24 percent in 2020 to 21 percent last year, but remained well above the 14 percent who said their financial situations deteriorated in 2019. The number of adults who said they were able to pay all of their monthly bills in full also rose from 83 percent in 2020 to 86 percent in 2021.
Financial well-being rose across racial lines last year as well, with a notable spike in financial stability among Hispanic adults. The number of parents who said they were financially stable also rose 8 percent from 2020.