The worst of inflation might be in the rear-view mirror, but the share of Americans who say they're "doing OK financially" has hit a four-year low.Notably, the share of parents with kids who say they are doing OK dropped from 69% in 2022 to 64% in 2023.
A lot of that has to do with inflation, as 35% of the 11,400 survey respondents say rising prices were the "main financial challenge" in 2023, the highest of all self-reported answers, including retirement savings and debt., but the survey suggests that the cumulative effect of high inflation over the past few years has been a strain on household finances.
Inflation subsided after reaching a year-over-year peak of 9.1% in June 2022, but it's been hovering around 3% for nearly a year, according to the consumer price index, which tracks the price of commonly bought goods and services. Over the past three years, CPI inflation has increased by 18%.These findings are reflected in the Fed's survey: While 34% of respondents say their income increased in the previous year, 38% of all respondents say they are spending more, too.