According to the Federal Reserve Board’s May 2023 report Economic Well-Being of U.S. Households in 2022, nearly four in 10 US adults reported that they couldn’t cover a $400 emergency expense with cash, savings, or a credit card paid off at the next statement.
The Federal Reserve Board noted, the higher savings aren’t distributed evenly, with most held by top income households. And just because economists call it “excess” savings doesn’t mean households have “enough” savings. It’s just more than normal—and often still not sufficient during tough times. The data also shows that even with “excess” savings, the number of people who said they could cover an emergency expense in 2019 (63%) was the same in 2022.
A few more highlights from the report include:
Overall financial well-being declined markedly over the prior year. Seventy-three percent of adults were doing at least okay financially in 2022, down 5 percentage points from 2021.
The share of adults who said they were worse off financially than a year earlier rose to 35 percent, the highest level since the question was first asked in 2014.
More adults experienced spending increases than income increases. Forty percent of adults said their family’s monthly spending increased in 2022 compared with the prior year, while 33 percent said their monthly income increased.
While some adults saw both their spending and their income increase, 23 percent of adults said that their spending had increased but their income had not.
The share of adults who said they spent less than their income in the month before the survey fell in 2022 to below the level it had been before the pandemic.