U.S. consumer finances were slightly stronger in July versus April according to a survey of households released by the Federal Reserve.
The Fed, which released the results as a supplement to its annual Survey of Household Economics and Decision-making, said at least 77% of adults responded they were at least “doing OK” in July, up from 72% in April.
“The substantial layoffs that occurred in March and April upended the lives of many families. However, by July, some people had returned to work and others were receiving financial assistance,” the report said. As a result, there was an uptick in the overall rate of financial well-being.
There was wide variety however in the responses across income distribution. Among lower-income households, only 25% of workers had returned to their jobs, compared to 39% for workers with family incomes over $100,000.
According to research group Opportunity Insights, the highest-paying one-third of jobs have almost fully recovered. The lowest-paying one-third of jobs remain 16% lower than their levels before the pandemic.
Analysts say the Fed has contributed to inequality through policies that disproportionately benefit shareholders. Households’ stock portfolios rose $5.7 trillion in the second quarter, the Fed said.
John Friedman, co-director at Opportunity Insights, said the data on wealth, “highlights the inequalities in the recovery in the sense that high-income workers not only have jobs that for the most part have come back; they also have savings that have continued to grow.”
Federal Reserve Chair Jerome Powell has said inequality is slowing growth.
“Those are things that hold back our economy,” Powell said. “If we want to have the highest potential output and the best output for our economy, we need that prosperity to be very broadly spread.”
On Monday, the Fed said U.S. households’ net worth rose nearly 7% to $119 trillion for the quarter from April to June.
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