More than a quarter of adults in the U.S. are facing financial difficulties. 72% of Americans reported “living comfortably” or “doing well,” according to December 2023 data from the Federal Reserve.
The remaining 28% were either “just getting by” (19%) or “having a hard time getting by” (9%). The 72% who are at least doing well represents the lowest proportion since the onset of the COVID-19 pandemic in April 2020. Before 2020, the rate had not fallen this low since 2016.
The Federal Reserve tracks whether people feel their financial situations are improving or worsening in the U.S. In 2023, 31% of respondents felt they were worse off than the previous year. This is a decline from 35% in 2022, but still 11 percentage points above the 20% of respondents who felt better off than a year ago.
From 2015 to 2021, more Americans felt their financial situations were improving than worsening. The opposite has been true in 2022 and 2023.
What Are the Main Financial Challenges for Americans?
In the past two years, more respondents cited inflation as the reason for their financial difficulties than any other cause. Inflation peaked at a 40-year high of 9.1% in June 2022 and has yet to return to the Fed’s target of 2%.
After inflation, Americans pointed to the costs of basic living expenses and housing as their main financial challenges.
Does Education Impact Financial Security?
Adults with higher levels of education were more likely to feel financially secure. In 2023, 87% of respondents with a bachelor’s degree or higher reported doing at least well, compared to 67% of those with some college or a technical or associate degree and 63% of those with only a high school diploma or GED.
The lowest reported financial security rate was among people who did not finish high school or its equivalent: less than half reported doing well financially.
Source: USA Facts