More Americans Now Feel Worse off Financially than Feel Better Off

The Federal Reserve tracks whether people feel their financial situations are improving or worsening in the US. In 2023, 31% of respondents felt they were worse off than the year prior. This is down from 35% in 2022, but still 11 points higher than the 20% of respondents who felt they were better off than a year ago.

From 2015 to 2021, more Americans felt their financial situations were improving than worsening. The opposite has been true in 2022 and 2023.

What are Americans’ Main Financial Challenges?

Over the past two years, more respondents cited inflation as the reason for their financial difficulties than any other cause. Inflation reached a 40-year high of 9.1% in June 2022 and has yet to return to the Fed’s target of 2%.

After inflation, Americans pointed to the costs of basic living expenses and housing as their top financial challenges.