Based on the results of an annual survey conducted by the Federal Reserve in 2021, the Survey of Household Economics and Decision-making (SHED), U.S. families reported positive economic circumstances, despite uncertainty about the pandemic throughout the year.
“In 2021, perceptions about the national economy declined slightly. Yet self-reported financial well-being increased to the highest rate since the survey began in 2013,” the survey said. “The share of prime-age adults not working because they could not find work had returned to pre-pandemic levels. More adults were able to pay all their monthly bills in full than in either 2019 or 2020. Additionally, the share of adults who would cover a $400 emergency expense completely using cash or its equivalent increased, reaching a new high since the survey began in 2013.”
Families with children also reported an improved financial picture last year.
“After declining in 2020, parents’ assessments of their financial circumstances rebounded in 2021,” the Fed survey said. “This improvement is consistent both with reduced childcare burdens as schools returned to in-person classes, as well as additional financial resources provided to parents such as the enhanced child tax credit (CTC). Most parents also said that their child was doing better academically, socially, and emotionally in 2021 than they were a year earlier.”
The enhanced child tax credit was in place for most of the year in 2021, although it expired at the end of the year.
The Fed survey went into a bit more detail about that.
“Starting in July 2021, most parents of children under age 18 saw their income supplemented by the enhanced CTC,” the Fed report said. “Eighteen percent of all adults, and 70 percent of adults living with their children under age 18, reported receiving monthly CTC payments in 2021. An additional 5 percent of adults living with children under age 18 did not know if they received monthly CTC payments.”
The survey added that those who received the child tax credit were more likely to save it than spend the money on anything else.
“The ways people used the CTC payments varied by income. Higher-income adults were most likely to save the largest portion of their credit, whereas lower-income adults were most likely to spend it on housing. For instance, 54 percent of recipients with income of at least $100,000 saved the largest portion of their credit, whereas only 18 percent of recipients with income less than $25,000 did so,” the Fed survey said.
Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.