[Watch] The Economic Well-Being of U.S. Households in 2023

By Fed Communities Staff

Whitney Felder

Good afternoon, and welcome to Connecting Communities. Thank you for joining us for today’s webinar, the Economic Well-Being of U.S. Households in 2023. I’m Whitney Felder, marketing communications specialist at Fed Communities, and I’ll serve as your moderator for today’s session.

Today’s discussion will be led by experts from the Federal Reserve Board of Governors, and I’d like to quickly introduce them. We first have Jeff Larrimore. He is the Chief of Consumer and Community Research at the Board.

We have Alicia Lloro and Ellen Merry, both principal economists in the Consumer and Community Research Division at the Board. And finally, we have Anna Tranfaglia, business analyst at the Board.

Now, before we get started, if we could move to slide four where we can take care of just a few housekeeping items.

Views expressed during this session are those of the speakers and are intended for informational purposes only. They do not necessarily represent the views of the Federal Reserve System or Fed Communities.

Microphones have been muted. Please use the Q&A feature throughout the session to submit your questions. We promise to get to as many questions as possible during the Q&A portion of the presentation.

I invite you to keep the conversation going and engage with us on X, formerly known as Twitter, using the hashtag #connectingcommunities and visit fedcommunities.org for a variety of CD articles, resources, and data from across the Federal Reserve system. And finally, this session will be recorded, and the presentation, video, and podcast will be available on fedcommunities.org within the next two weeks. I would now like to turn the presentation over to Ellen Merry. Ellen, the floor is yours.

Ellen Merry

Thank you, Whitney. We’re really happy to be able to share these results with you today. If you can turn to slide six, I want to talk about some of the approach that we have taken with the SHED survey. This is our 11th year conducting the survey. We survey a nationally representative sample of over 11,000 people each year, and the results we’re presenting today focus on the most recent survey, which we fielded in late October of 2023. So they give us a picture of the financial circumstances of US adults as they headed into the new year.

The goals of the survey are that we combine subjective and objective information for a fuller picture on how people are faring financially. We also ask about people’s motivations for their financial decisions, such as their reasons why people rented. And we have the flexibility to cover some new and emerging issues; for example, this year we added new questions on food sufficiency, on caring for children and for aging or disabled adults, and on homeowners insurance. And we’ll touch on some of the results from those new questions in our presentation today. Finally, I want to note that all the reports from the 11 years of the survey and the underlying data are publicly available on the Board’s website, and you can see the link at the bottom of this page (https://www.federalreserve.gov/consumerscommunities/shed.htm) where you can find all those resources, and hope you’ll check that out.

Turning to slide seven, I want to highlight a few key takeaways from the results we’re presenting today. First, as I mentioned, the results we’re presenting are from the survey we fielded in October of 2023, so the results from that survey showed that financial well-being then was similar to what we saw in 2022, yet remained well below the recent high that we saw in 2021. Inflation continued to be a major concern for many families, particularly the cost of food. Low-income adults faced notably high rates of economic hardships such as food insufficiency and skipping medical care due to costs, and challenges paying rent, including being behind on rent at some point in the past year were above the levels that we saw in 2022. Finally, adults with caregiving responsibilities were less likely to be working for pay and paid child care was a substantial expense for working parents.

Skipping to slide nine. I’m going to focus first on some results on family finances. Now to give an overview of people’s financial situation in the fall of 2023, we start off with two series. The top line is a subjective measure of people’s financial well-being. So we ask people how well they’re managing financially and they could choose from four options: living comfortably, doing okay, just getting by, or finding it difficult to get by. The top line shows the share who answered with the highest two of those four categories, that is, that they were doing okay or they were living comfortably. In late 2023, 72% of adults reported that they were in these top two categories in terms of how they were doing financially, which was essentially unchanged from 2022, but down from the high in 2021. It was also lower than before the pandemic in 2019.

Now the bottom line, the line in dark blue, shows the results from perhaps our most well-known question asking people how they would handle an unexpected $400 expense. In 2023, 63% of adults said they would cover such an expense exclusively using cash, savings, or a credit card paid off at the next statement. We call this combination of methods of payment cash or its equivalent. And this share was similar to 2022, but down from the high in 2021. If you turn to slide 10, here we’re going to look at the measure of overall well-being from the prior slide, but broken out by different educational groups. As in our previous surveys, adults with at least a bachelor’s degree, the top line in dark blue, continue to report higher financial wellbeing than those with lower levels of education. That said is shown in the figure, the gap in wellbeing by education is narrowed slightly in the past several years.

The share of adults with at least a bachelor’s degree who reported they were doing okay or living comfortably has declined four percentage points since 2021. While this share among those with less than a high school degree, that yellow line at the bottom, has remained relatively flat. However, you look back to the beginning of the survey, we see that the gap in wellbeing by education has widened somewhat. Since 2013, the share of adults with at least a bachelor’s degree who were doing okay or living comfortably increased 10 percentage points; whereas those with less than a high school degree saw essentially no lasting gains over this time. If you turn to slide 11, as in the 2022 survey, we again included an open-ended question asking people about their main financial challenges or concerns. Before 2022, the question was last asked in 2016 and that’s why we’re including these three years on this figure.

With this question, respondents could type in the text response to the question or they could check a box that said none if they didn’t have any financial challenges to report. We’ve categorized the text responses based on keywords and the categories are not mutually exclusive. For example, if someone said, “Rent costs keep going up,” the response would be included as reflecting challenges of both inflation and with housing. Now, turning now to the results as shown in the leftmost set of bars, inflation was the most common financial concern in 2023 at about one-third. The second set of bars for basically living expenses as reflective of difficulties like covering necessities and making ends meet. That was the next most common concern, and this category may be picking up some inflation concerns as well. And responses for these in most other categories were similar in 2023 to what we saw in 2022. But looking to the estimates from 2016, the shares who mentioned concerns with inflation and basic living expenses were higher in the last two years than in 2016.

In contrast, the share answering none, that is, who did not report any financial challenges was considerably lower in the last two years compared to 2016. Finally, I want to note two other points which are not captured in the figure. First, many people, particularly low-income adults specifically mentioned concerns about the cost of food and groceries and their responses to this open-ended question. And second, renters are more likely than homeowners to mention that housing was a challenge for them. Now moving on to slide 12. In addition to the results from that open-ended question, this 2023 survey also included a new closed-ended question asking people, how changes in the prices they paid compared to last year affected their financial situation?

Respondents were offered five-answer choices ranging from much worse to much better, but for simplicity in the figure, we’re just showing the share of people who said much worse. Focusing on the bottom bar in yellow, overall, 19% of adults said that changes in the prices they paid compared to last year made their financial situation much worse. Looking at the top set of bars, the ones in medium blue, this share was higher among those with lower income. And looking at the results by race and ethnicity in the middle set of bars, those are the dark blue bars, the share was also higher among Hispanic adults.

Now moving on to slide 13. We also asked people what actions they had taken in responses to higher prices. In the top set of bars spending responses were the most common action people took in response to higher prices including switching to cheaper products and using less of the product. In the middle set of bars, reducing savings was much more common than increasing borrowing. And then the bottom set of bars responses related to generating income, like working more or asking for a raise were less common responses. And note that ask for a raise here reflects only those people who said that they specifically asked for a raise in response to higher prices.

Now, we also fielded the same question in 2022, and we’ve included the results from that year in this figure as well, and compared to actions that people reported taken in the prior year survey, in 2023, people were less likely to report that they were changing their spending in responses to higher prices and also less likely to say they reduced their savings, but they were slightly more likely to say that they asked for a raise. Now moving on to slide 14. In addition to the open-ended question I asked, I talked about before about people’s main financial challenges or concerns. SHED includes a number of other questions that provide insights on a range of different challenges that people can face. And skipping medical care because of cost is a type of hardship and one that we’re able to track over time with the survey. So if you look at the right end of the figure, in 2023, 27% of adults went without some form of medical care because they could not afford it, which is similar to this year in 2022, but up from 2021.

Now, although we don’t show it on the slide, we ask a follow-up question about the types of medical care that people skipped, and dental care was the most frequently mentioned followed by visiting a doctor. Some people also reported that they skipped prescription medicine, follow-up care, or mental health visits. Now turning to slide 15. I mentioned that one of the new questions that we added to the survey this year was about food insufficiency, which the USDA defines as sometimes or often not having enough to eat. To help paint a picture of the economic hardships that people face, on this figure, we included the results from that new question, which are shown in yellow, along with the inability to pay bills in medium blue in the middle, and skipping medical care due to cost in dark blue.

Now, if you start at the bottom of the figure, overall, we see that 7% of adults sometimes or often did not have enough to eat in the month prior to the survey, 17% were not able to pay all their bills in full in the month prior to the survey, and 27% skipped medical care due to costs in the prior 12 months. Now, the bars at the top of the figure show that these measures for different income groups. And it’s perhaps not surprising that we see differences in the prevalence of hardship by income, but it’s striking how high the incidence was for low-income adults despite the presence of safety net programs like SNAP and Medicaid.

Now, that concludes my portion of the presentation. But before we continue, we have a polling question. It should be popping up on your screen soon, if it hasn’t already. And that question’s about: what is the biggest financial challenge that you hear about in your community? And there are a number of different answers for that. And so we look forward to hearing your responses, and we’ll come back to those results at the end of the presentation. But now I will turn the floor over to Anna.

Anna Tranfaglia

Thank you, Ellen. Starting on slide 16, I’m now going to share some results on housing and specifically I’m going to focus on renters for the first few slides. We focus on renters and the challenges they face partly because one of the goals of SHED is to provide insight into the financial circumstances of low- and moderate-income adults, and this is a group that disproportionately rents their home. Turning to slide 17. One challenge for renters that showed up in results from several questions on the survey in 2023 was the increasing cost of rent. As shown in the first bullet, the median monthly rent payment was $1,100 in 2023, this is up 10% from 2022. Additionally, a higher share of renters reported being behind on rent. As shown in the second bullet, in 2023, 19% of renters reported being behind on their rent at some point in the past year. And this share also ticked up two percentage points from 2022.

Turning to slide 18. In this figure, we see that renters had challenges paying for other bills besides their monthly rent payment. Now starting on the right-hand side of the figure, in this set of three bars, we see that more than one quarter of renters represented by the darkest blue bar had at least one bill that wasn’t paid in full in the month prior to taking the survey. This is more than twice the share of homeowners. Homeowners represented by the lightest blue bar here. Now, going over to the other side of the figure, looking at the set of bars on the left, we see that utility bills such as water, gas, and electric bills had the highest rates of not being paid in full, with 11% of renters making less than the full payment in the prior month.

Now moving to the right through this figure, we also see that 8% of renters didn’t pay their phone, internet, or cable bill in full in the month prior to taking the survey. Seven percent of renters didn’t pay rent in full and 6% didn’t make a full car payment. In fact, for each of the general bill categories in this figure, we see that renters were less likely than homeowners to pay these types of bills in full. Moving on to slide 19. We’re going to return our focus to monthly rental payments. In this figure, we see that renters who moved in the past two years, and this is represented by the lighter of the two blue shades here, had higher rent payments compared with those who moved before that. This group is represented by the dark blue bars.

This was the case both overall and across different regions of the country. It is important to note, however, that in addition to reflecting changes in rent prices over time for new leases, these differences in rent prices for those who moved recently or in the past two years may reflect differences in the types of units that these renters chose to move into. Even so, these results are consistent with the increase in overall rent that we’ve seen earlier in the survey.

Moving to slide 20. This figure on slide 20 shows results from a question that asks respondents how satisfied they were with various neighborhood amenities.

Starting at the top of the figure is top pair of bars. We see that most adults were satisfied with the overall quality of their neighborhoods. However, when we jumped down to the two bars at the bottom of the figure, we see that fewer adults were satisfied with the cost of housing in their neighborhood. In fact, only 29% of renters said they were satisfied with the cost of housing in their neighborhood. For the other categories, we see that a majority of parents, so both parents that rent their homes and parents who own their homes, were satisfied with the quality of their local schools. And with respect to crime risk, about 70% of homeowners and 50% of renters said they were satisfied. But again, taking this figure as a whole, we see that renters were less satisfied with these aspects of their neighborhoods than homeowners.

Turning to slide 21. Now, I’m going to talk about and share some of our new findings on homeowners insurance. In the 2023 SHED, we added a new question asking those who own their homes free and clear or those who own their homes without a mortgage, whether or not they have homeowners insurance for their primary residence. This topic has been increasingly in the news, both because of the growing cost of homeowners insurance as well as the lack of availability of this type of insurance, with some insurers even pulling out of certain states completely. The map on this slide shows that share of homeowners without homeowners insurance among those who own their home and don’t have a mortgage by census division.

To start, we’re going to focus on the dark pink region. Here, 26% of those living in the West-South-Central division, this is made up of the states of Arkansas, Louisiana, Oklahoma, and Texas, did not have homeowners insurance. We also found that homeowners living in these four states were the most likely to report being affected financially by a natural disaster. The rest of the southern states, which are the two blocks of states in the two different shades of light pink, as well as the mountain states, and this is the block of states in the darker gray color, these states also had relatively high shares of those going without homeowners insurance. In contrast, New England had the lowest incidence of this.

Moving to slide 22. On this slide, we focus on financial resources available to those without homeowners insurance, and we find that homeowners with fewer financial resources are the ones most likely not to have homeowners insurance. The figure on this slide shows stark differences by income. Among homeowners without a mortgage, 44% of those with incomes under $25,000 did not have homeowners insurance. This is compared to just 2% of those with incomes of $100,000 or greater. Income is just one kind of financial resource that homeowners may have available to them. Although not shown here, we do have another question in the survey that asks people about their other assets such as savings accounts, retirement accounts, or other equities. We find that homeowners who list no other types of financial assets are more likely to go without homeowners insurance. So taken together with the results on the previous slide, these results generally suggest that homeowners who are most at risk are also most likely to not have homeowners insurance.

And before I hand it over to my colleague Alicia, I just want to add one more reminder that if you have any questions about what’s been covered or anything else, please feel free to add them via the Q&A tab on the right and we’ll do our best to answer these after the presentation.

Alicia Lloro

Thank you, Anna. So for the rest of the presentation, I’ll be covering caregiving, which was a new topic on this year’s survey. One of the goals we had in adding the questions on caregiving was to gain some insight into the ways in which people manage care for their loved ones and how these decisions also relate to their employment decisions.

Turning to slide 24. So we’re first going to consider childcare, and here we limit our analysis to parents of children under age 13, as younger children are the most likely to need childcare. So to level set, the figure on this slide shows what share of the population is living with their own children under age 13 and then we show how this breaks out by single versus dual parent households and employment. Overall, 19% of all adults live with their own children under age 13. So that’s represented by the pieces of the pie on the chart here that are broken out. And then the various slices starting in yellow and then different shades of blue break out this 19% by the number of parents in the household, so dual parent versus single parent and their employment status.

On the next slide, we’re going to look at the rates at which families that had at least one working parent used paid childcare. So turning now to slide 25. Families that had no stay-at-home parent were the most likely to use paid childcare. So we focus on the top two bars in the figure. We see that about 40% of single working parents as well as those families with two working parents use paid childcare. This compares with only 15% for those who use paid childcare among parents where one member of the couple did not work, so that’s the 15% with two parents only one working.

On the bottom half of the figure, we show the share who used paid childcare by family income, and we see that higher income families are more likely to use paid childcare and also they’re more likely to use it more intensively, so they use more hours per week. One reason we think we might be seeing these results by income relate to the cost of childcare, which we’re going to look at on the next slide. So we could turn to slide 26. For those using paid childcare, these costs can make up a substantial share of the family budget. So before turning to the figure on the slide here, I’d just like to note that overall the median monthly amount that parents paid for childcare was $800 a month, and for those who paid for 20 or more hours of childcare each week, it was $1,100 a month.

So we wanted to get a sense of the magnitude of how much these parents were paying for childcare. So we compared the median monthly amount they paid toward childcare to their median monthly housing payment. So on this figure here, we divided it separate for homeowners versus renters, but either way, about 50 to 70 people who use paid childcare spend about 50 to 70% as much per month on childcare costs as they did on their housing payment. And one reason we chose housing payment other than data availability is that’s typically people’s single largest monthly expense. So turning now to slide 27. We’re going to look at unpaid care for an adult relative or friend who may need assistance due to aging, disability, or illness. So all the way on the right, we see that overall 16% of adults provided this type of care and these shares were similar among both men and women. This was also true regardless of age, if we’re looking at patterns across gender for different ages on the left of the figure.

So initially this result was surprising. It certainly wasn’t what I expected to see, and it’s also different from what we see about unpaid care for children where… We don’t present that here, but we have another question on the survey that asks those living with a spouse or partner who typically provides the care for the children when they’re at home, and for both men and women, the mothers and fathers say that the mothers are more likely to be providing the care. But nonetheless, for this question, the split was pretty even between men and women. And we also verified, there’s a different survey, the American Time Use Survey, just to make sure other surveys were finding this result, and they also found something similar on that survey. So interesting and different from what my prior was.

On the next slide, we’re going to zoom in on the middle age of groups, prime age adults, those ages 25 to 54 to look at some of their employment outcomes. Like childcare, providing regular care for other adults can affect one’s ability to do other work for pay. Unpaid caregivers, particularly those who are providing daily care, we’re less likely to be doing work for pay. As we note here in the first bullet, among prime age adults, 32% who were caring for another adult did not have a paid job. This compares with 24% of those without these caretaking responsibilities. And then we note in the second bullet that this difference was even larger among those with daily caretaking responsibilities where about half of those did no work for pay.

Turning now to slide 29. That wraps up all of the prepared content that we have for today. In the full report, which is posted online, we cover many more topics as noted here, by the boxes shaded in blue. So the report has a chapter on employment. We also include banking and credit, retirement investments, higher education and student loans, as well as a chapter on income. We also have more information in the report on the topics that we presented today than we had time to present here today. So now I would like to hand things over to Jeff, who’s going to help in moderating a Q&A session.

Jeff Larrimore

All right. Thank you, Alicia, and thank you, Anna and Ellen. We have a lot of time for questions today, so I’m really looking forward to trying to get through as many questions that all of you have as we’re able to in the roughly half hour that we have to chat with you all. First I want to turn back to the polling question that Ellen asked you earlier about the largest challenges that you all are hearing about in your communities. And two areas really stood out from that question, particularly people talked about housing and people talked about inflation, as two areas that were really notable challenges they were hearing about.

So with that, given that those were two areas that are particular concerns, I wanted to start with a question about housing, which is: whether you have any information on how costs for homeowners have been changing? And what the barriers are looking like for renters who are looking to buy? So Anna, can I pass this question to you in terms of the barriers to homeownership?

Anna Tranfaglia

Sure. The SHED also asks homeowners about their total monthly mortgage payment and we ask specifically about the number or the total number that you send to the bank, which usually includes your escrow payment, which includes a mortgage and property taxes and homeowners insurance. And we know from other reporting and other data sources that the cost of homeowners insurance is increasing as well as property taxes; however, we don’t in the survey ask homeowners directly about any of these items unfortunately. So while we may be indirectly picking up some of these increased costs of homeowners have been facing, it’s going to be pretty hard to tease them apart in the SHED data. The second part of that question, barriers to homeownership, there is a question about asking renters why they rent, and some of the biggest issue… or the most common reasons given are financial. So it’s challenges saving up and affording a down payment, concern that they would be approved for a mortgage, or also just concern or challenges about covering just a monthly mortgage payment.

Jeff Larrimore

Great. Thank you. And so I said that the other area that really stood out in the challenges [we heard] about is inflation. And a question that we got that ties into that, which I’ll pass to Ellen is, the $400 question has been a question that comes up a lot, has been really been a focus of the survey. And so we got a question asking us, where did the $400 come from and have we thought about adjusting it for inflation given these challenges of higher prices that people have?

Ellen Merry

Sure. The $400… The idea behind using that $400 number was to try to get at the type of expense that people might have to cover out of the blue, something like a car repair or an appliance breakdown or this sort of thing. And we did explore whether or not we needed to change that in the 2022 survey. So that’s one year’s prior, not the most recent one that we filled it. We did a little bit of a test, a split sample test, where we asked a fifth of the respondents on the same question, but with $500 in it instead of $400. And the results were very similar. It was only different by about a half a percentage point of the share who said that they would cover it by cash or equivalent. So, for right now, we’ve kept the amount same thinking that it’s more or less picking up that the spirit of what we were trying to get at with the number.

Jeff Larrimore

Thanks. We have a couple of questions that have come in about multiple job holders, particularly thinking about the information, Ellen, that you presented showing the number of people who took on an extra job to make ends meet and that the percent was relatively low. We’re wondering, are there any questions in the survey asking about how many people are working more than one job and how that compares to previous years? Ellen or Anna, I think either one of you can take that one probably.

Ellen Merry

Anna, do you have it?

Anna Tranfaglia

Well, we do know if folks are working full time or part-time… Ellen, I might hand it off for you about multiple jobs.

Ellen Merry

I don’t… I mean, that was in the inflation chapter. Respondents worked more or got another job that was 18% of people. But I don’t have the numbers handy on the share who were working more than one job in the latest report. Do you have that?

Jeff Larrimore

I think this is a… I can use this opportunity to plug the fact that… So we do have a question about this in the survey, and if you go to the Federal Reserve website that has all of these shared data, including the appendix and all the individual questions, we do have a question there about the share of people who have multiple jobs. Those particular issues, there is more data on the Federal Reserve’s website to be able to answer that question. In terms of the trend over time, I believe that the answer is it looks pretty similar over time, although I don’t know the exact share that we’re seeing in the data.

All right. I’m going to turn this question over to Alicia, which was a question about child care, which is: whether we know anything about the cost of child care varying across different areas of the country? Do we see differences there and recognizing that there’s higher and lower cost places across the country?

Alicia Lloro

Yeah. I am not remembering if we check that specifically across different regions how that may vary. That’s a good question, something we can look at. Anna, do you happen to remember if looking at that… I know with the child care stuff, it’s somewhat limited in what we can do just because our sample size is smaller. If you remember that pie chart I had, it’s 19% of all adults. So 19% of our sample… That said, we probably could split it by region. I’m just not remembering if that’s something we did, but Anna may remember.

Anna Tranfaglia

We did, but the sample size gets pretty small pretty quick because parents of children under 13 is a relatively small group. So it works for… First for region, it works for some census divisions but not others.

Jeff Larrimore

Right. Thanks. And that leads, I think, actually into another question we have about some of are the methods and what we’re controlling for in the analysis. Had a person who was wondering… As we are designing the survey, what’s being controlled for? Are we normalizing for region? Are we controlling for the race ethnicity of the respondent to be national representative? So can you share anything about what those controls look like they’re going into analysis? And Alicia, I’ll pass this one to you if that’s okay.

Alicia Lloro

Sure. So the survey is designed to be nationally representative and we weighed it. If you look in the methodology section of the report, we list the variables that we weighed on, but it’s weighted to the March supplement of the CPS on income. We also weigh it by race, age. Am I leaving anything out? So that’s sort of the weighting of the survey so that generally our sample of 11,000 responses that we get is to be nationally representative. For the various estimates that we present here today, sort of behind the scenes, we do often account for other factors, but this is more of a case-by-case basis, sort of what makes sense for the question that we’re looking at. So there’s really no single answer there.

But often if we’re looking at a housing thing, we’ll split it by renter or homeowner or we’ll look urban versus rural and… I mean, there’s just so much content. For each thing, we can’t necessarily say what we’ve controlled for or looked at. Generally, what we present are sort of raw, means unless we specifically say, oh, this is for a renter or this is for a black householder or someone with a bachelor’s degree, so on and so forth. But we do look at things behind the scenes, so if you have specific questions, we can hopefully answer those.

Jeff Larrimore

Thanks. And another methodology question for you, Alicia. When we say that we surveyed 11,000 people, is that the number of surveys distributed or the number of responses received? And how does this number represent the state of the average American given the population size?

Alicia Lloro

Yeah. Thanks. So the 11,000 is the number of responses that we receive, so the survey goes out to more people than that, that’s the number of responses. And as I said before, the sample is designed to be nationally representative, a fun fact of statistics, the sample size that you need, it doesn’t depend on how large the sample is that you’re sampling from. So it may be a little bit counterintuitive. With 11,000, we have pretty good precision in our ability to produce estimates for the population as a whole for the nation.

Jeff Larrimore

Great. This one is actually also a childcare question, so it might be for you, Alicia, and I might want to weigh into on whether we have data on households caring for a child under to 18 and an elderly parent, do we have that end of the care scenario as well?

Alicia Lloro

Yeah. So that is something we looked at. I don’t think we put it into the report. So I’ve seen in the media. They refer to those people as the sandwich generation, which I happen to be one of, so it’s something I was interested in. I mean, it is small, but it’s something that we’re at least able to provide an estimate for in the SHED with our caregiving and our childcare question. But from what I recall, it was small. So given our sample size limitations, it’s pretty hard to dig in further from there. I don’t know, Anna, if you happen to remember any more details on that.

Anna Tranfaglia

We looked at those who were both paying for childcare under 13 and caring for an elderly parent. What’s going to be even bigger is this exact situation if our caregiving questions are just asked to parents with children whose youngest child is under age 13, a larger sample is including all households who are living with their own child under 18, so that group’s going to be a little bigger. But we didn’t include any findings for either of these cases if you’re interested. But it’s another reason to use the data. It’s very easy to look at either one of these groups.

Jeff Larrimore

So, Ellen, this question is, I think, going to be best directed at you, which is, we had somebody that wanted to know about how older adults are faring, and what the survey can say about how elderly adults are doing compared to younger adults?

Ellen Merry

Older adults, we talk a little bit about retirees in the last chapter of the report, and we actually find that they’re doing a little bit better in terms of their overall well-being than adults overall. So the number I gave in, I think, the opening of the presentation was 72% of US adults said that they were doing okay or living comfortably and I think that number for the retiree population was around 80%. So they’re doing a little bit better.

Jeff Larrimore

Thanks. There’s a couple of questions that people have had about other topics covered in the report, including whether the report covers anything on insurance other than homeowners, so other types of insurance, and whether it covers a child care subsidy. So a couple of different areas people are wanting to know, like, “Are we covering these?” “Do we cover these other topics?” And wanted to take this actually to ask a slightly broader question to Ellen or Alicia about the process that goes into choosing what goes into these questions. So can you talk a little bit about the way that you all are thinking about what questions to include each year?

Ellen Merry

I could take a stab at what questions we include. So each year, given that we’ve been surveying for 11 years, since 2013, we have a body of questions. So we do want to keep some continuity with a lot of the material we cover, so we can cover how things are changing from year to year. So that takes up the bulk of our time. But then, there’s another group of questions that sometimes we feel like we don’t need to cover every year, but we may bring back onto the survey, and questions about the gig economy or as an example of that that we didn’t include this year, but we expect to bring those back on.

And then, there are usually issues that are emerging, things like inflation. Obviously for the past couple of years, we added new questions on that, trying to be responsive and to understand more about those conditions. New products, we added questions a few years ago about buy now pay later to try to understand more about that, and the homeowners insurance question. Often those new questions are suggested to us either by members of our team or other colleagues. Sometimes we get them from comments and presentations like this, that you really ought to be looking into this. So we take all that into account, but we have a limited amount of space each year to try to tack on new questions.

Jeff Larrimore

Thanks. And I’ll dig a little bit into the specifics as I was lumping those questions together. So Anna, does the report… do we have anything on insurance other than homeowners?

Anna Tranfaglia

Not in the 2023 report. We do not. We have spoken in the past about auto insurance as made the report. And I guess… Sorry. We do ask if you have health insurance and that has been on the report for… I’ll need to check the actual number of years, but that’s not a new question. We normally ask if you have health insurance. But that is pretty much it for the insurance questions.

Jeff Larrimore

And Alicia, do you want to touch on childcare subsidies?

Alicia Lloro

Yeah. So that’s not something that we ask about. Yeah.

Jeff Larrimore

But we are in the process at this point of thinking about next year’s survey as well. So if there’s areas like that that you all are interested in, there will be a question in your post-event survey [which you’ll get] after this session, asking you about questions and topics you think would be interesting to include either in this presentation next year or in future surveys. So topics like that that you think would be interesting, please, please let us know because that would be helpful as we’re planning for next year. And I pass the next question to you, which is: whether there’s any question of the survey about the effect that climate is having on financial health and looking at the effects of natural disasters on how people are faring financially?

Anna Tranfaglia

We have a few questions. We’ve had a few questions on natural disasters and extreme weather for a few years. This year, in the 2023 survey, we first asked everyone if they had been financially affected by natural disasters or severe weather, and we followed up with a second question where we gave survey respondents multiple options and they said yes or no, so we kind of limited the set of ways that they could be financially affected by natural disasters and extreme weather. So we kind of have two questions, one, where we just let the respondent say, “Yes, I have,” “No, I haven’t.” It’d cover a lot of cases and another where you can actually see the shares of people who say that, “Yes, I was and it affected me this way.”

Jeff Larrimore

Thanks. So Alicia, this next question is for you, which is, we have a question wanting to know about the raw survey data. At what geography are people able to do analysis with the data that we’re putting out publicly?

Alicia Lloro

Thanks. So the lowest level of geography that we put out publicly is state. So you’re able to have state and then anything up from that. So Anna presented the map on homeowners insurance by census division. We also have census region; there’s four of those. We also showed some results by that. The internal data we have goes down to census tracts, but for confidentiality reasons, that’s not something we can release publicly. Also, just a caveat. So we do release data at the state level, but you may not be able to have a lot of a sample for every state because it’s not designed. We just don’t have the sample to be representative for each state. So I don’t want people to be disappointed out there if they’re going in looking for Wyoming and no, there’s not enough. I picked on Wyoming, maybe there is, but I don’t know.

Jeff Larrimore

That’s always a good concern to keep in mind whenever working with the data is making sure that there’s enough sample to be able to say something meaningful. I appreciate you.

Alicia Lloro

Yeah. It’s one of those annoying things we say when people ask questions that we don’t have the sample, but yeah, it’s important.

Jeff Larrimore

Ellen, this next question is for you, turning back to the $400 question that we talked about earlier, about how people would handle emergency expenses, and whether you consider people putting it on a credit card is equivalent to cash? And if so, why?

Ellen Merry

Yes, we split that two ways. If somebody says that they would put it on a credit card and pay it off over time, we do not count that as paying cash because they’re financing it essentially and they’re going to be paying interest on it that way. But if somebody says that they’re going to put it on a credit card and pay it off at the next statement, then we do treat that as… the term I use cash or the equivalent because it indicates they do have the savings pretty handy to be able to pay off the bill. So they aren’t using credit as… They’re using the credit card probably more for convenience than they are as a source of credit. So that’s why we split it that way. Thanks.

Jeff Larrimore

And Alicia, I’m going to turn back to you for a question about… actually a couple questions about banking and credit. So last year you had questions on the survey on buy now pay later products. And did you continue to ask about that and what are you seeing in the trends for buy now pay later?

Alicia Lloro

Yeah. Thanks. We did continue to ask about buy now pay later. We saw an increase in buy now pay later use, but I wouldn’t characterize it as huge. I’m forgetting off the top of my head, but a couple percentage points. And I think we also continue to ask reasons why people use buy now pay later, and those have largely remained consistent since we started asking the question, most people say that it’s convenient, that’s the top one. One thing that was notable about the reasons is that those with lower income were more likely to say that it was the only way they could afford it, is why they use buy now, pay later. And just even in the overall population, if I’m remembering right, I don’t have the numbers in front of me, but it was around half, I think, that gave that response that they used buy now pay later because it was the only way they could afford it. So yeah. So we have quite a bit on buy now pay later, that should be in the full report. And then your second question was…

Jeff Larrimore

I hadn’t given you my second question yet, so second question is-

Alicia Lloro

Oh, okay. That’s why I don’t remember.

Jeff Larrimore

The second question related to banking is: what we see on banked and unbanked populations in the survey this year?

Alicia Lloro

Yeah. We continue to ask on the survey about bank account ownership. We again find around at least in the SHED 6% of adults report not having a checking or savings account, which is consistent with what we’ve seen in prior years. We also ask about use of, quote, unquote, “alternative financial services,” so things like check cashing, non-bank check cashing, money order, and then we ask about the alternative credit products, like Payday Pawn, auto title. So we have all of those items in there in the report. Generally, we’ve seen that the use of money order and check cashing has declined over time, although it may have been more flat in recent years, and that has generally been true among the banked and the unbanked, which is something that we’re following. So yes, so we have continued to report on that and the full information is in the report.

Jeff Larrimore

This next question is a great question for all three of you actually. I’d be interested in your perspectives on, which is: what do you think is the most important aspect of the survey this year that really jumped out at you is either interesting or surprising? And Ellen, can I start with you on that?

Ellen Merry

Sure. I think… Interesting. I don’t know that it’s surprising is that even though headline inflation has come down quite a bit, there’s still a big effect on households. And you see that in things like the results on the main financial challenges that I mentioned. And even though the share of people who are taking actions based on inflation is down slightly, it’s still pretty high in terms of people moderating the behavior. I think that was noteworthy to me.

Jeff Larrimore

Thanks. Anna?

Anna Tranfaglia

I think one important set of findings were just on how renters were faring. If you study renters, you know that this is sometimes a difficult group to get timely data for. And so it’s nice when the SHED comes out yearly and we can see and clearly identify renters as opposed to making some assumptions about who might be renting, but look to see how they’re faring. And we included some of these results in the report. But if you use the public data, you can look at how renters and homeowners are faring across a lot of different multiple outcomes and different… like student loans or healthcare or other things. So I think focusing on renters was helpful because the cost of rent has gone up and we are seeing challenges that they’re facing.

Jeff Larrimore

Thanks. Absolutely. And Alicia?

Alicia Lloro

Yeah. So I might take two if I can cheat. But, so, I definitely agree with Ellen on inflation. Going into this, when we first get the data, there was–and there kind of still is–this narrative around the economy, by lots of measures, looks like it’s doing really well, like employment is going strong, and why has consumer sentiment been so poor? Why do people have such a negative view on the economy? And when I looked at the data and then I saw the results on what are your main financial challenges and you see inflation, was it just about the same as last year? Even though the official number has gone down, it’s like, “Oh, aha…” This is just me, Alicia speaking, not the Federal Reserve. I was like, “Oh, it seems like, you know, it’s inflation.” People are still really like, whether wages have risen or not, but that’s how they’re feeling about it.

And so to me that kind of spoke to that puzzle a little bit, especially if you dig into what their answers were. So we noticed a big an uptick really, and people specifically this year mentioning the price of food and groceries as a main financial challenge. And then, as Anna mentioned, renters were facing higher rents and really struggling. Again, me, Alicia speaking, people are seeing higher food costs, higher housing costs, those are two of the basic necessities for surviving, food and shelter. So that kind of… I don’t know, it made a lot of sense to me why, if that’s how people are feeling. And then, cheating a little bit, the other thing that really stood out to me was the result on homeowners insurance. So we added that question, we’ve been hearing a lot about homeowners insurance and that seemed… We’re always constrained for space on the instrument, but that seemed like a quick hit.

I personally was surprised at how high it was for those going without homeowners insurance among those who own. And then when we saw the patterns by income and other financial resources and also just where in the country… I mean, in hindsight, it makes sense. It’s like, oh, yeah, the places with lots of disasters or severe weather, their rates are probably really high and they’re not going to have insurance. But nonetheless, it was surprising and I think it’s important because we probably worry about those folks. And I’m just noticing the time, so I should stop there. Thank you.

Jeff Larrimore

All right. Well, thank you, Alicia. Thank you, Ellen. Thank you, Anna. I really appreciate all the insights that you are able to provide with us today. And with that, I’m going to pass things over to Whitney.

Whitney Felder

Thank you for that, Jeff. That was a really good discussion. I know there were a ton of questions, and so thank you all for doing that for us. So we want to thank our panel of speakers. Attendees, thank you for spending your valuable time with us this afternoon. We hope you enjoyed the discussion as much as we did.

Before we end the discussion, we do have just a couple small requests. Please complete the survey that will be sending you immediately after the event, so we can improve and continue to bring you timely and relevant topics. Particularly, the SHED team is interested in knowing what topics related to household finances you would like to include in future surveys or in future presentations of results. So definitely be sure to answer that question and the rest of the questions in the poll.

As mentioned, today’s session will also be available on YouTube and the Connecting Communities page in about two weeks. Visit Fed Communities at fedcommunities.org to access additional articles, resources, and data about community development across the Federal Reserve. Follow us on social media. We’re on LinkedIn, X, Instagram, and Facebook. And don’t forget to subscribe to the Fed Communities newsletter by clicking the About Us tab and then click subscribe.

And finally, mark your calendars. We do have our next Connecting Communities webinar happening on August 8th. More details and registration information will come out soon for that event.

Thank you all again. Speakers, thank you all so much. Attendees, thank you all so much. And have a great afternoon.