The job market is by many measures the strongest in decades, with the unemployment rate hovering near a half-century low, job openings near record highs and workers feeling empowered to demand higher pay. The benefits of that environment are clear in the Fed survey: Respondents said they were more likely to have demanded and received raises and promotions than in previous years, and less likely to have lost a job. About 33 percent of respondents said their incomes had risen in the past year, up from 30 percent in 2021.
But those gains were overwhelmed by rising prices. Only 49 percent of Americans said they spent less than they made each month, down from 55 percent in 2021. Nearly two-thirds said they used less of a product or stopped using it entirely because of inflation. More than half said they saved less.
The drop in overall well-being in 2022 was the largest in the survey’s 10-year history, but that partly reflected the gains made in 2021, when the federal government was still providing high levels of assistance to many households through the expanded Child Tax Credit and other programs. In 2019, before the pandemic, 75 percent of adults said they were doing at least OK financially, only modestly above the 2022 figure.
Democratic leaders, including some White House officials, have at times dismissed surveys of economic sentiment, arguing that more concrete measures of income and employment tell a rosier story. Overall personal income has generally been rising even after being adjusted for inflation, although gains have slowed in recent months, and wages have risen fastest for the lowest-earning workers.
But in a call with reporters, Fed officials noted that the survey showed declines not just in subjective measures of economic sentiment but also in more objective measures. Only 63 percent of respondents said they had cash available to cover a $400 emergency expense, for example, down from 68 percent in 2021.