For Americans, 2021 delivered healthiest finances in 8 years

Americans’ financial health reached its highest level in nearly a decade last year, the Federal Reserve said Monday, spurred by a strong job market and government support payments.

Almost eight in 10 adults said last fall that they were either “doing okay or living comfortably” when it came to their finances in 2021, according to an annual Fed survey, the highest proportion to say so since the survey began in 2013.

The survey of 11,000 adults was taken last October and November, when inflation had topped 6% year-over-year, though before Russia’s invasion of Ukraine pushed gas and food prices sharply higher. The Fed did not ask any specific questions about how inflation was affecting Americans’ financial situations.

The survey also took place before the huge omicron wave of coronavirus cases occurred in late 2021, causing some Americans to pull back on travel and other spending.

The financial health captured by the report helps explain the resilience of consumers in the face of higher prices, as consumer spending, adjusted for inflation, has continued to rise even as inflation is near a 40-year high.

The report found that members of all racial groups reported healthier finances, with Hispanics showing the sharpest improvement and Whites the smallest.