CFPB report finds that household financial health is declining

In late December, the Consumer Financial Protection Bureau released a report covering the financial health of American households. Here is the report summary:

In 2022, consumer financial health continued to be buoyed by pandemic relief, high employment, and increased savings accumulated during the first year of the pandemic. But financial health was no longer as high as it was during the first year of the pandemic. Average financial well-being had returned to its 2019 level. More families were having difficulty paying all their bills in 2022 than in 2021. Income variability increased and consumers were using high-cost credit products at pre-pandemic levels, after a substantial drop in 2021. The finances of Hispanic consumers, renters, and consumers under age 40 deteriorated rapidly between 2021 and 2022. Meanwhile, substantial disparities in making ends meet continue. Black, Hispanic, and low-income consumers are far more likely to have difficulty paying bills and are more likely to be turned down for credit or not apply because they fear being turned down. Looking to the future, many consumers are unprepared for an economic downturn, should one occur. If they lost their main source of income, 37 percent of households could not cover their expenses for more than a month. Half of Black and Hispanic households could not cover their expenses for more than a month.

Read the CFPB press release here and the full report here.

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