The average financial well-being of U.S. consumers has returned to its pre-pandemic level, with more families reporting having difficulty paying all their bills in 2022 than the year before, according to the Consumer Financial Protection Bureau’s annual Making Ends Meet survey released today. This year’s survey found that income variability increased and consumers were using high-cost credit products at pre-pandemic levels after a substantial drop in 2021. In particular, the finances of Hispanic consumers, renters and consumers under age 40 deteriorated rapidly between 2021 and 2022.
Many consumers are not financially prepared for a disruption to their main source of income, even as unemployment remains low, according to the report. Nearly 37% of all households reported that they could not cover expenses for longer than one month, with half of Hispanic and Black households saying they could not cover expenses. Also, one in eight households experienced lost income from unemployment or a reduction in work hours in 2022, and roughly one-third of households experienced a major unexpected expense, including vehicle repair, unexpected medical expense or a household repair.
Despite the declines in 2022, the CFPB noted the report paints a mixed picture of overall financial health. For example, average credit card debt fell sharply from March to June 2020 and has generally remained lower through September 2022, after adjusting for inflation. Still, income became substantially more variable and some consumers appeared to be turning to more expensive forms of credit. “And should an increase in unemployment occur, many households are unprepared for even a relatively brief period of low income,” the report said.
