The Covid-19 pandemic caused unprecedented damage to the economy in 2020, but relief and stimulus measures undertaken by the government offset the harm for many households, according to a new survey of the economic well-being of U.S. households from the Federal Reserve Board of Governors.
By the end of 2020, about three-quarters of Americans said they were doing at least okay financially, about the same as before the pandemic began, the report says. Readings on several key measures in the survey of 11,000 adults were similar to 2019 levels, including rates of bank account ownership, preparedness for retirement and funds available to meet emergency expenses.
But not everyone was able to weather the economic storm, and about one in four adults said they were in worse financial shape than the year before, with the greatest harm accumulating among less-educated workers and lower-income households. “A clear pattern from the survey is that financial challenges in 2020 were uneven, and frequently left those who entered the year with fewer resources further behind,” the report says.
Job loss was a key factor. Less than a quarter of workers who lost their jobs had returned to their old positions by the end of 2020. Those who kept their jobs, including many college-educated, white-collar workers, “generally had stable or improving finances in 2020,” the report says. “However, those who suffered a layoff and an extended period of unemployment saw a deterioration of their financial circumstances.”