WASHINGTON (5/29/15)--To help track the economic recovery, the Federal Reserve has for the second year running compiled a survey on the economy’s biggest driver: consumers.
Released this week, the Survey of Household Economics and Decisionmaking evaluates the economic well-being of U.S. households and identifies potential risks to their financial stability.
This year’s report, which covers 2014 data, made several key findings, including that financial hardship nationwide continues to be common; the availability of work is still a concern; and low-income individuals are having a difficult time saving.
Specifically, the report found that many households believe that if they were presented with an economic hardship, they would be unprepared to deal with it.
When faced with a $400 expense, for example, the survey found that nearly half could not cover the cost, or would have to sell possessions or borrow money to make ends meet.
“Even though many respondents to the survey are doing OK financially, we find this to be a sign that many are ill prepared for even a relatively modest financial disruption,” said Jeff Larrimore, Federal Reserve economist for the Division of Consumer and Community Affairs.
On the labor front, the survey found that one-third of full-time workers and one-half of part-time workers said they would work more hours if they could.
The survey also revealed that low-income individuals and families appear to be having trouble saving, with the majority of low-income respondents only able to save for short-term emergency funds rather than long-term goals such as retirement.
Further, many of those who have the resources to save for retirement said they lacked the skills to do so.