More Americans reported that they were feeling good about their own financial status last year, but they had less positive feelings about the economy.
The share that said they were “doing okay or living comfortably financially” in 2021 hit a nine-year-high and was the largest share since the Federal Reserve Board started doing a national survey looking into Americans’ economic well-being. The Fed has been conducting the Survey of Household Economics and Decisionmaking (SHED) since 2013.
“This important perspective helps the Federal Reserve better understand the economic challenges that existed during that phase of the pandemic recovery,” Federal Reserve Board Governor Michelle Bowman said in a statement.
In a report released Monday that drew from the survey, 78% of adults reported they were doing at least okay in the fourth quarter of 2021, up by 3 percentage points compared to 2020. The increase in shares of people who said they were doing okay was seen across the board for all racial and ethnic groups.
The share of adults who said they would be able to cover a $400 emergency expense with either cash, savings, or with a credit card that they could pay off when the next bill was due also rose — it reached 68%, also a 9-year-high since the survey started in 2013. (Some 11% of respondents said they would not be able to pay for a $400 emergency expense “by any means,” similar to the 12% who said so in 2020.)
The survey was conducted last October and November, before the omicron variant and before inflation hit a 40-year-record in March when the consumer price index showed that prices increased 8.5% in 12 months.
Some 15% of workers said they were in a different job than 12 months earlier. Most who changed jobs said the job change was an improvement.
At the same time, despite the increase in people feeling good about their individual finances, the share of people who rated the economy as “good or excellent” dropped by two percentage points to 24% in 2021, or “about half the rate seen in 2019,” the report authors noted.
Because there was only one question asking how well people thought the economy was doing, the officials said there were not enough details to explain the disconnect between the two perceptions. It could be because people take different factors into account when measuring their own financial life compared to that of the nation as a whole, Fed officials told reporters on a press call about the report.
The survey also showed that the pandemic continued to play a role in people’s decisions regarding career and employment in 2021. Around 15% of adults reported that they had changed jobs in the previous 12 months and most reported that their new job was better.
The survey also underscored the importance of being able to work remotely for many employees. Responses suggested that the ability to work from home was as important as pay for some.
During the week of the survey, 22% of employees worked entirely from home, down from 29% in late 2020, but well above the 7% who worked entirely from home before the pandemic.
“Among those working from home, the share of employees who would look for another job if their employer required they work in person was similar to the share who would look after a pay freeze,” the report said.
“Most employees who worked from home preferred to do so, often citing work-life balance and less time commuting. Those working from home indicated that they would be about as likely to look for a new job if required to return to the office as if their employer instituted a pay freeze.