Fed: Inflation is the most widespread financial problem in the US

The US Federal Reserve (Fed) reported that 33 percent of adults cited inflation as their main financial challenge in 2022. The "US Household Economic Well-Being" report, prepared as a result of the survey conducted by the Fed in October last year with the participation of approximately 12 thousand people, revealed that there was a decrease in financial well-being compared to the previous year. The report noted that the rate of those who said they were in good financial shape decreased by 5 points compared to 2021, falling to 73 percent. It was reported that the rate of adults who said they were in worse financial shape than a year ago reached the highest level since the question was first asked in 2014, with 35 percent. The report indicated that more adults were experiencing an increase in spending rather than an increase in income, and that 40 percent of adults reported that their monthly spending had increased, while 33 percent reported that their income had increased. While some adults reported that both their spending and income had increased, it was stated that 23 percent of adults said that their spending had increased but their income had decreased. The report emphasized that the proportion of those who said they spent less than their income fell below the pre-pandemic level last year. Spending and savings affected by inflation The report touched on the fact that 1 in 3 of adults received a raise or promotion last year and 13 percent wanted a raise or promotion, and noted that 70 percent of those who wanted a raise stated that they received one. The report noted that in parallel with the decline in general financial well-being, the proportion of adults who said they could cover a $ 400 emergency expense decreased from 68 percent to 63 percent. The report underlined that inflation affects people's spending and saving options in several different ways, and it was conveyed that approximately 2 in 3 of adults stopped using a product or used it less due to inflation, 64 percent switched to a cheaper product, and 51 percent reduced their savings due to high prices. The report noted that access to financial services provided by banks and credit unions remains high, noting that 94 percent of adults will have a bank account in 2022, but significant disparities continue to exist based on income, age, race, ethnicity, and disability. The statement noted that nearly two-thirds of tenants say that their reason for renting a home is that they cannot afford the down payment required to purchase a home, while 17 percent of tenants said they were late on their rent in the previous year. Inflation is the most common financial problem The report emphasized that inflation was the most common answer in the open-ended question about main financial difficulties, while 28 percent of those surveyed said they did not have any financial concerns. The report noted that 33 percent of those who said inflation was their main financial difficulty, and that many people mentioned the costs of food, energy, and utilities.