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Fed survey: Many in U.S. felt OK about finances at end of 2021 despite poorer view of economy

Fed survey: Many in U.S. felt OK about finances at end of 2021 despite poorer view of economy
Despite concerns about the U.S. economy, Monday's survey showed that about 78% of respondents said they were "doing okay" financially or living "comfortably" from last October through December. File Photo by John Angelillo/UPI | License Photo

May 23 (UPI) -- According to a yearly assessment by the Federal Reserve, many Americans were already concerned at least somewhat about the U.S. economy late last year before the rising inflation and energy prices that have marked 2022 so far.

According to the Fed's Survey of Household Economics and Decision Making, or SHED, less than a quarter of respondents said during the final three months of 2021 that they felt the domestic economy is in good or excellent shape. That's down from 26% in 2020 and 50% in 2019.

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"This trend contrasts starkly with people's increasingly favorable assessment of their own financial well-being," the 98-page report states.

SInce then, however, Inflation has continued to rise by annual increases not seen in four decades.

Despite the stated concerns, about 78% said they were "doing OK" financially or living "comfortably" from last October through December -- which was the highest share in the nine-year history of the Fed survey and 3 points higher than 2020.

The survey showed particularly large increases among Hispanic adults and parents, who said financial well-being was up 8 points to 75% during the fourth quarter of 2021.

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"The SHED results provide valuable insight into Americans' financial conditions during the late fall of 2021," Federal Reserve Board Governor Michelle Bowman said in a statement.

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"This important perspective helps the Federal Reserve better understand the economic challenges that existed during that phase of the pandemic recovery."

The 11,000 respondents to the survey voiced optimism on several fronts.

Almost 70% of respondents said that they could cover a $400 emergency expense using cash or equivalents, the highest mark since SHED surveys began in 2013. Almost 50% said they thought their local economies were "good" or "excellent" -- a rise of 43% over the previous year.

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The share of those who responded favorably about the local economies, however, was still sharply lower than the 63% reported in 2019.

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