The New Report of the Consumer Financial Protection Bureau (“CFPB”), a US Government Agency, Finds Household Financial Health Is Declining After Several Years Of Increased Savings
In December 2022, a US federal agency, the Consumer Financial Protection Bureau (CFPB) released a new Making Ends Meet report that reports on the financial health of American households. Since 2019, the annual Making Ends Meet consumer surveys showed improvement in financial health during the first few years of the COVID-19 pandemic, due in part to a tight labor market, reductions in consumer spending, and access to pandemic-related relief programs. However, data from early 2022 revealed a decline in several key measures, as well as a rapid deterioration in financial health for Hispanic consumers, consumers under the age of 40, and low-income renters. In addition, even though unemployment remains low, more than 37% of households were unable to cover expenses for longer than one month if they lost their main source of income. The 2022 survey was mailed to a sample of consumers in January, with responses collected between January and March. Utilizing data collected from the survey, as well as from the CFPB’s Consumer Credit Panel, today’s report focused on several measures of consumer financial health, including: The CFPB’s financial well-being score, which serves as a comprehensive measure of overall subjective financial well-being. Whether households had difficulty paying bills and expenses in the previous year. How long households could cover expenses if the main source of income was lost. Bottom line: Many consumers are not financially prepared for a disruption to their main source of income, even though unemployment remains low, according to Report findings. Nearly 37% of households report that they could not cover expenses for longer than one month, even with accessing savings, borrowing money, selling assets, or seeking help from family and friends.