In late 2023, US households continued to experience the impact of inflation, despite a slight easing of price pressures, according to a report released by the Federal Reserve on Tuesday. The survey, which focused on household economics and decision-making, unveiled that the majority of Americans believed their financial situation had changed little over the past year. However, parents reported that times had become harder, indicating a worrisome trend.

The survey findings showed that 72% of adults considered themselves to be doing at least okay financially in October 2023. This marked a decline from 78% in 2021 and represented the lowest rate since 2016. Nonetheless, the figure remained relatively steady compared to the 73% recorded in 2022. Of particular concern was the fact that only 64% of parents reported being financially stable, a 5-percentage-point drop from the previous year and the lowest level since 2015 when data collection began.

Inflation emerged as the primary financial worry among respondents. The report revealed that 65% of adults believed high prices had worsened their financial situations, despite the fact that consumer inflation had significantly decreased from around 9% in June 2022 to below 4% by the time of the survey. Furthermore, although 34% of respondents stated that their family's monthly income had increased over the past year, 38% noted that their spending had also risen.

The survey also shed light on the ability of adults to cover unexpected expenses. Around 63% stated that they could handle a hypothetical $400 emergency expense using cash or its equivalent, a figure consistent with the previous year but down from a record high of 68% in 2021. Additionally, the survey indicated that meeting rental housing costs was more challenging in 2023 compared to the previous year. Approximately 19% of renters admitted to falling behind on rent at some point in the prior year, compared to 17% in 2022. The survey attributed this to escalating rental costs, which have hindered efforts to alleviate overall inflation. The median monthly rent soared by 10% to $1,100.

The Federal Reserve's annual survey on household economics and decision-making encompassed responses from 11,000 individuals and was conducted in October 2023. It highlighted the persistent struggles faced by US households in the face of inflationary pressures, even as the rate of inflation showed signs of moderation.