Report on the Economic Well-Being of U.S. Households in 2014 | Summary and Q&A

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May 27, 2015
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Federal Reserve
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Report on the Economic Well-Being of U.S. Households in 2014

TL;DR

The Federal Reserve's annual SHED survey found that while most adults are doing well, some are struggling, particularly in terms of work availability and financial preparedness.

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Key Insights

  • 😯 The SHED survey provides valuable insights into consumers' financial and economic lives.
  • 🧑‍⚕️ Work availability remains a concern, with demand for additional hours among workers.
  • 🖤 Many individuals are not financially prepared for emergencies, indicating a lack of savings and reliance on borrowing.
  • 🧑‍🏭 The perceived value of post-secondary education varies based on factors like institution type and degree completion.
  • 😘 Lower-income respondents face higher rates of financial challenges, including lower savings and short-term saving goals.
  • 🖤 Confidence in managing retirement savings is lacking despite the shift towards self-directed accounts.
  • 🤞 Overall, the survey indicates a hopeful trend for U.S. households, with optimism about long-term forecasts.

Transcript

[Narrator:] The Federal Reserve Board conducted its second annual Survey of Household Economics and Decision-making, also called the SHED Survey, in October 2014. [Eric Belsky:] It gives the Federal Reserve an opportunity to ask consumers questions directly and with relatively quick turnaround, so that we can make evidence of what consumers are thi... Read More

Questions & Answers

Q: What is the purpose of the Federal Reserve's SHED survey?

The SHED survey allows the Federal Reserve to understand consumers' thoughts and behaviors related to financial and economic matters by directly asking them questions.

Q: Are there concerns regarding work availability?

Yes, the survey shows that there is pent-up demand for additional work, with a significant portion of full-time and part-time workers expressing a desire for more hours if available.

Q: How financially prepared are respondents for emergencies?

The survey reveals that almost half of respondents would struggle to cover a $400 emergency expense, either by borrowing money or selling something, indicating a lack of preparedness.

Q: Did the survey find any variations in the perceived value of post-secondary education?

Yes, the survey found that respondents who attended for-profit institutions or failed to complete a college degree were more likely to believe that the education was not worth the cost and struggled with student loan repayment.

Q: What are some financial challenges faced by lower-income respondents?

Lower-income participants showed lower rates of savings and were more likely to save for short-term goals, such as emergencies, rather than long-term goals like retirement.

Q: Do respondents feel confident in managing their retirement savings?

No, about half of the respondents expressed low confidence in managing their retirement savings, which are increasingly being held in self-directed accounts like 401k's or IRA's.

Summary & Key Takeaways

  • The SHED survey allows the Federal Reserve to gather direct consumer feedback on various financial and economic topics.

  • Most adults are faring relatively well, but there are concerns about work availability.

  • Many individuals face financial hardships and are ill-prepared for unexpected expenses.

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