Top financial concern: High prices

Americans are feeling the pinch as prices for goods continue to rise, according to the Federal Reserve Board’s new Economic Well-Being of U.S. Households in 2023 report. The annual survey revealed that 65% of adults said their financial situations had worsened due to price changes in 2023, with 19% stating that these changes had made their finances “much worse.”

Despite a slight decrease in the percentage of adults who reported being financially comfortable, the Fed noted that higher prices remained a top financial concern for many. The report comes on the heels of the Bureau of Labor Statistics’ report that prices rose 3.4% in April compared to the previous year.

Low-income adults are particularly struggling to make ends meet, with many unable to pay their bills in full, afford enough food, or access necessary medical care. The survey also found an increase in the use of Buy Now, Pay Later programs, with 14% of adults utilizing these services in the prior year.

Renters are also feeling the squeeze, with the median monthly rent payment increasing by 10% in 2023. Nearly one-fifth of renters reported being late on rent payments at least once in the prior year. Homeowners in the South, particularly those with incomes under $50,000, were more likely to go without homeowners insurance.

Despite these challenges, some positive trends were noted in the report. The percentage of adults who either asked for or received a raise remained steady, attributed to the strength of the labor market. Additionally, almost two-thirds of adults said they could cover a $400 emergency expense in cash, although 13% said they would not be able to pay it at all.

Overall, the report paints a picture of financial strain for many Americans, with rising prices and stagnant wages making it difficult for families to make ends meet.