Many Adults Would Struggle to Find $400, the Fed Finds

Four in 10 American adults wouldn’t be able to cover an unexpected $400 expense with cash, savings or a credit-card charge that could be quickly paid off, a new Federal Reserve survey finds.

About 27 percent of people surveyed would need to borrow or sell something to pay for such a bill, and 12 percent would not be able to cover it at all, according to the Fed’s 2018 report on the economic well-being of households, which was released Thursday.

The share that could cover such an expense more easily has been climbing steadily and now stands at 61 percent, up from just half when the Fed started this annual survey in 2013. Still, the finding underlines the fact that many Americans remain on the edge financially even as this economic expansion is approaching record length and people have become more optimistic.

Household finances over all have shown a marked improvement over the life of this report, thanks in large part to an improving labor market that has lifted wages and left more Americans with jobs. Three-quarters of adults said they were “doing O.K.” or “living comfortably” when asked about their economic well-being, up from 63 percent in 2013.

“We continue to see the growing U.S. economy supporting most American families,” Michelle W. Bowman, a Federal Reserve Board governor, said in a statement.

Underlying disparities persist. Just 52 percent of rural residents said their local economy was doing well, compared with 66 percent of city dwellers. And while nearly seven in 10 white adults viewed their area’s economy as good or excellent, only six in 10 Hispanic adults and fewer than half of black adults said the same thing.

But adults belonging to minority groups were more likely to say that they were better off than their parents. About 64 percent of black adults with at least a bachelor’s degree reported doing better financially than their parents had, a figure that fell to 58 percent for white adults. The gap was even wider among the less educated: About 61 percent of black high school graduates said they were better off than their parents, compared with 52 percent of whites with a similar education.

Hispanic adults also reported progress at higher rates than their white counterparts.

“This measure shows some evidence of narrowing racial disparities across a generation,” the report said. “In addition, having a bachelor’s degree or more is generally associated with greater upward economic mobility.”

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