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Nearly 40% of Americans can't cover a surprise $400 expense
Nearly 40 percent of Americans would struggle to cover an unexpected $400 expense, according to a new report by the Federal Reserve — a stark reminder of many people's financial insecurity even amid solid economic growth. "Relatively small, unexpected expenses, such as a car repair or replacing a broken appliance, can be a hardship for many families without adequate savings," the researchers found.
With political campaigns for the 2020 election heating up, such figures provide fodder for candidates who argue the economy is hobbled by searing inequality and vulnerable to a downturn after 10 years of growth since the last recession. The data also highlight what is often a disconnect between "headline" economic numbers, such as unemployment and gross domestic product, that pundits and politicians often trumpet and the more complex reality facing millions of Americans.
What that means on the ground: Even a thriving economy can leave people close to the edge. The Fed found that 27% of survey respondents would have to borrow money or sell something to cover a $400 emergency — 12% couldn't cover it at all. Other findings from the annual Fed report, which is based on a survey last fall of 11,000 people:
17% of U.S. adults are unable to pay all of their bills in full every month.
25% of Americans skipped necessary medical care in 2018 because they couldn't afford the cost.
30% of families must cope with income that that varies from month to month.
25% of adults who are still in the labor force have no retirement savings or pension.
30% of people either can't pay their bills or are one modest financial emergency from serious trouble.
"Across the country, many families continue to experience financial distress and struggle to save for retirement and unexpected expenses," Fed Reserve Board Governor Michelle Bowman said in a statement that accompanied the report.
Just heard it on the news, and had to look it up
Nearly 40 percent of Americans would struggle to cover an unexpected $400 expense, according to a new report by the Federal Reserve — a stark reminder of many people's financial insecurity even amid solid economic growth. "Relatively small, unexpected expenses, such as a car repair or replacing a broken appliance, can be a hardship for many families without adequate savings," the researchers found.
With political campaigns for the 2020 election heating up, such figures provide fodder for candidates who argue the economy is hobbled by searing inequality and vulnerable to a downturn after 10 years of growth since the last recession. The data also highlight what is often a disconnect between "headline" economic numbers, such as unemployment and gross domestic product, that pundits and politicians often trumpet and the more complex reality facing millions of Americans.
What that means on the ground: Even a thriving economy can leave people close to the edge. The Fed found that 27% of survey respondents would have to borrow money or sell something to cover a $400 emergency — 12% couldn't cover it at all. Other findings from the annual Fed report, which is based on a survey last fall of 11,000 people:
17% of U.S. adults are unable to pay all of their bills in full every month.
25% of Americans skipped necessary medical care in 2018 because they couldn't afford the cost.
30% of families must cope with income that that varies from month to month.
25% of adults who are still in the labor force have no retirement savings or pension.
30% of people either can't pay their bills or are one modest financial emergency from serious trouble.
"Across the country, many families continue to experience financial distress and struggle to save for retirement and unexpected expenses," Fed Reserve Board Governor Michelle Bowman said in a statement that accompanied the report.
Just heard it on the news, and had to look it up
