Fed Survey: Amid Pandemic, Americans Remain Able to Cover Emergency Expenses

One in five adults employed in February had been furloughed or laid off by April, according to the Federal Reserve’s annual Report on the Economic Well-Being of U.S. Households released today. The burden of job losses associated with COVID-19 and the policy response fell most sharply on lower-income workers, with 39% of those employed in February with household income below $40,000 reporting a job loss.

Nine in 10 people who had lost their jobs in March were still connected to their employers, however, with 77% told to expect to return to work but not given a date and 14% given a specific date or already brought back by mid-April. As expected under states’ stay-at-home orders, 53% of those still employed did some of their work from home, and 41% did all their work remotely—up from 7% in 2019.

The April 2020 survey showed that 64% of Americans would cover a $400 emergency expense in cash. The oft-cited benchmark was in line with the 63% in the 2019 survey results and 61% in 2018, although the figures diverged for those who had lost jobs amid the pandemic. Two-thirds of those with no job loss or hours reduction could cover the $400 expense, while only 46% of those laid off or given fewer hours agreed.

While the Fed’s full annual survey covers 2019, the Fed commissioned a shorter supplemental survey in April to analyze effects of the pandemic. Survey results from 2019 showed that U.S. households entered the coronavirus pandemic in a strong position. The number of unbanked Americans held steady at 6% in 2019, and the number of “underbanked” Americans—those with a bank account but who also use alternative financial services such as money orders or check cashing—also remained at 16% in 2019.

The survey also saw strength in savings practices. As in 2018, 7 in 10 respondents said they could cover three months of expenses from savings alone or from a combination of savings, assets and credit if they lost their main source of income. The survey found that 25% of non-retired respondents reported having no retirement savings or pension, a one-point improvement from 2018.

Overall, three quarters of U.S. households surveyed last fall said they are “doing okay” or “living comfortably,” unchanged from 2018. This figure is up 13 percentage points from 2013. Meanwhile, just 6% said they were finding it difficult to get by, a drop of more than half since 2013.