Survey of Household Economics and Decisionmaking, July 2020 Update | Summary and Q&A

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September 18, 2020
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Federal Reserve
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Survey of Household Economics and Decisionmaking, July 2020 Update

TL;DR

Despite the challenges of the pandemic, financial well-being for Americans showed improvement in July 2020 compared to April, thanks to government assistance programs and employment efforts.

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Key Insights

  • 🛀 Financial well-being among Americans showed improvement in July 2020 compared to earlier periods, despite ongoing employment challenges.
  • 🖐️ Availability of government assistance programs and charitable organizations played a role in supporting individuals' financial stability.
  • 🌥️ A significant portion of unemployment insurance recipients received benefits larger than their previous wages, highlighting the impact of the CARES Act.
  • 😘 Low-income families were more likely to receive unemployment benefits and experience improvements in financial security.
  • 🍵 The ability to handle small financial emergencies increased in July, indicating greater preparedness and resilience.
  • 🖐️ Job recovery showed some positive signs, with a higher percentage of laid-off workers returning to their former jobs by July.
  • 🌱 The Federal Reserve plans to continue monitoring the economic well-being of US households through the Survey of Household Economics and Decisionmaking in the fourth quarter of 2020.

Transcript

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Questions & Answers

Q: How did Americans' financial well-being in July 2020 compare to April and October 2019?

According to the survey, 77% of adults reported being financially stable in July, slightly higher than 72% in April and 75% in October 2019. This suggests a gradual improvement in financial well-being over time despite the pandemic's impact.

Q: What percentage of adults in July felt confident in handling unexpected $400 emergency expenses?

In July, 70% of adults expressed confidence in their ability to pay for an unexpected $400 emergency expense using cash, savings, or a credit card paid off at the next statement. This is an increase from 63% in October 2019 and indicates greater financial preparedness.

Q: How did employment situations change for those who were laid off during the pandemic?

In April, only 5% of laid-off workers had returned to their former jobs, but by July, this number increased to 30%. An additional 10% found employment elsewhere and did not expect to return to their previous jobs. However, a higher percentage expected their layoffs to be permanent compared to April.

Q: What impact did unemployment benefits have on families during the pandemic?

Unemployment benefits helped fill the employment gap for many families. 40% of unemployment insurance recipients reported receiving benefits larger than their previous wages, while 36% received smaller benefits. Low-income families were more likely to receive unemployment benefits greater than their prior earnings.

Summary & Key Takeaways

  • In July 2020, 77% of adults in the US reported being financially stable, a slight increase from 72% in April and 75% in October 2019.

  • 70% of adults felt confident in being able to handle a $400 emergency expense in July, up from 63% in October 2019.

  • Although employment challenges persisted, with 14% of adults being laid off since the pandemic began, 30% of those laid off had returned to their former jobs by July, indicating positive job recovery.

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