(Reuters) – Inflation, which peaked at a 40-year high last year and currently remains high, has hurt the financial security of U.S. households, a Federal Reserve survey released on Monday showed.

According to this annual survey, many households in the United States have had to resort to dipping into their savings to make ends meet, when they have not simply decided to postpone their purchases or opt for cheaper products.

The number of people saying they will be “doing well financially” in 2022 or more has fallen by five percentage points to 73%, the steepest drop since the first such survey a decade ago. This rate had risen to a record high in 2021.

The share of people saying their situation has gotten worse jumped 15 points, to 35%, the highest level since 2014, when the Fed included this question in its study entitled “Survey of the economy and the decisions households”, the first of which dates back to 2013.

Annual inflation, as measured by the consumer price index, peaked at 9.1% last summer, the highest rate since the early 1980s. It has since fallen to 4.9 %, but remains above the Fed’s 2% target, despite an accelerated rise in interest rates to 5.00-5.25%. These rates were close to zero before March 2022.

Of those surveyed, 55% said their budget had been “much” affected by price increases. Within this group, parents with children under the age of 18, blacks, Latinos and people with disabilities are among those who have suffered the most from inflation.

Overall, a third of households cited inflation as the main financial challenge they face.

(Report Dan Burns; Claude Chendjou, edited by Blandine Hénault)

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