Lindsay (NYSE) Dunsmuir, and Ann Saphir

(Reuters] – U.S. households have reported the highest financial well-being levels since almost a decade of tracking, according to a Federal Reserve Report released Monday. The gains can be felt by all racial/ethnic groups.

According to the U.S. central banking’s “Survey of Household Economics and Decisionmaking”, workers were enjoying the advantages of working at home while the recovery from coronavirus continued. However, there was little enthusiasm to go back to work and a general lack of confidence in the labor market.

Fed Governor Michelle Bowman released a statement saying that the report offers “valuable insight” into Americans’ finances during 2021’s late fall.

This report was compiled from responses of 11,000 adult respondents in November and October 2021. Before a spike in COVID-19-related cases, economic growth briefly slowed down. However, it is consistent with data that shows Americans have experienced an increase in their financial situation over the last two years.

This is due to the combination of direct cash payments from the Pandemic Era and increased unemployment benefits. These helped cushion the impact of the pandemic in 2020/part of 2021 on the economy, rising asset values, tight job markets, and strong wage gains.

Fed officials stated that there was likely to be a contributing factor in the rapid rise of children going to in-person schools, and temporarily increased child tax credits passed in 2021.

Seventy-eight percent of adults reported living well or being okay with their finances, up from 75% for 2020. The highest number since 2013, when the survey was first conducted.

The financial well-being of all races and ethnicities increased, with an increase in Hispanics.

From 64% to 68% in 2020, 68% of Americans said that they could cover $400 worth of emergency expenses using savings, cash or credit cards.

Officials at the Fed stated that this increase was consistent with long-term financial improvements as well as factors such as larger bank accounts balances and possible financial relief.

APLENTY OF JOBS

The Fed currently tries to control inflation, which is at its highest level in 40 years. It switched to an aggressive monetary policy position late last year after having kept financial conditions loose for two years to protect the economy from the effects of the pandemic.

In March, the central bank started tightening and already has raised its overnight benchmark lending rate 75 basis points to try and dampen consumer demand in America. This is despite an increase in prices due to depleted supply chain caused by war in Ukraine and occasional pandemic-related lockdowns.

Fed monitors closely the U.S. unemployment rates, at 3.6% right now, and is nearing pre-pandemic levels.

Financial well-being reports showed that 15% of workers had made job changes in the year ending December, even though the unemployment rate had risen to 8%. The majority who said so thought the job move was a good thing.

The fall 2012 figures showed that 22% of the employees were able to work from home, which is a drop from 29% the previous year and significantly higher than the 7% who did not have to leave home during the epidemic.

According to the Fed report, most workers said that they want to keep doing so. They cited a better balance between work and life.