Dry econometrics rarely manages to deliver a thorough idea about what do the people actually feel like in certain economic conditions. Recently, many statistical indicators pointed a recovery from the painfully long economic recession. It seems that the numbers do not tell the whole story. It will take a long time for Americans, as well as for the rest of the world, to achieve the living standards of 2007. The FED consumer survey released earlier intends to throw some light on how Americans feel about the economic prospects.
Another main problem in interpreting dry economic indicators is that they do not convey a proper image of how income inequality is distributed. If the GDP started rising, the wealth be end up being ammased by few people.
The Federal Reserve Board released on Thursday the “Report on the Economic Well-Being of U.S. Households”. The report is based on a survey undertaken in September 2013 and focuses on a couple of categories among which are housing, credit, education, savings, retirement and health.
We tend to think the economic crisis belongs to the past, but Italy, an important Eurozone economy, entered into another economic recession as of yesterday.
FED consumer survey reveals economically stressed Americans
More than 60 percent of the respondents said their families are “doing ok” or they are “living comfortable” from a financial point of view. A quarter of the interviewees declared they are “just getting by”, while 13 percent are struggling to do so.
Because they are unsure of the economic situation and cannot plan ahead accordingly, 42 percent of the respondents ended up delaying major purchases, while 18 percent delayed “what they considered to be a major life decision,” probably referring to buying a house.
A sign that the economic recovery did not touch too many people is that a third of the respondents find themselves “somewhat worse off or much worse off financially than they had been five years ago,” as they say.
Because they lacked the financial resources, a third of the respondents were “going without some form of medical care.”
Retirement plans have changed because of the economic recession. Forty percent of the respondents aged 45 or older said they had to rethink their retirement plans.
The Fed consumer survey report concluded that “Large-scale financial strain at the household level ultimately fed into broader economic challenges for the country, and the completion of the national recovery will ultimately be, in part, a reflection of the well-being of households and consumers.”