Household financial conditions improved in July from April but uncertainties about layoffs and returning to work remain, according to a new report the Federal Reserve released today. In July, 77% of adults said they were doing at least OK financially, up from 72% in early April, and 75% in October 2019, according to a supplemental survey from the Federal Reserve’s annual Report on the Economic Well-Being of U.S. Households. “This increase is likely due to some people returning to work as well as the availability of assistance programs either from the government or from charitable organizations,” the Fed said.
However, the report noted that more laid-off workers expect their layoffs to be permanent, according to the report. In July, 22% of laid-off adults said they expected the layoff to be permanent, up from the 7% that felt that way in April. “While financial assistance programs provided some buffer from economic hardships and some people have returned to their jobs, many others remain out of work. Fourteen percent of all adults reported being laid off since the pandemic began,” the Fed said. Of those laid off, 30% said in the July survey they had returned to their former jobs, an increase from 5% in April and 10% said they were working elsewhere and did not expect to return to their old job.
Meanwhile, households are better able to handle small financial emergency than they were in October 2019, according to the Fed, and 70% of adults said in July they would be able to pay an unexpected $400 in emergency expenses, an increase from 63% last October.
