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Fed report shows high level of household financial well-being last year

by Andrew Moreau | May 29, 2022 at 1:48 a.m.

Across the nation, families seem to have largely recovered financially from the economic devastation caused by the lingering pandemic, with the Federal Reserve System issuing an in-depth study last week noting that American households are reporting they were better off in 2021 in many areas than before covid-19 began more than two years ago.

Indeed, the Fed's annual SHED report (Survey of Household Economics and Decision-making) noted that Americans say their financial well-being increased to the highest point in years.

It's important to note the self-reporting survey was taken largely in late October and early November of last year, before inflation began trickling through the economy and interest-rate increases fueled a looming affordability crisis in the housing market.

The report details the perceptions of families in areas that include their overall financial well-being, their income levels and sources, employment opportunities and job changes, their ability to handle unexpected expenses and access to banking and credit services.

Bottom line: the report says "self-reported financial well-being reached its highest level since the survey began in 2013, with 78% of adults doing OK or living comfortably financially."

Indeed, financial well-being increased among all racial and ethnic groups measured in the survey, with a large increase among Hispanic adults. Parents also were of particular note, with three of every four saying they were doing well financially, an increase of 8% from 2020.

More adults also said they felt comfortable being able to cover a small unexpected expense, defined as an emergency requiring $400 in cash or its equivalent. That was up by 50% from 2013.

The pandemic has caused a major job shift in the economy, driving many out of work because a business was forced to close out of health concerns or because of forced shutdowns to the economy. Supplemental federal unemployment benefits, combined with state payouts, drove some workers to the sidelines to wait it out and not search intensely for jobs.

The labor shortage that built up drove up wages in favor of workers and they have been searching for jobs, with more options at higher pay. Those who switched jobs last year generally said they were better off than in their previous one. About 15% of those in the Fed survey said they switched jobs in 2021, and 60% of those reported they were in a better work situation. Only 10% reported feeling like they were in a worse condition after the switch.

The work-from-home transition that many employers approved appears to be continuing. About 22% of employees said they worked entirely from their home and were happy about it. "Most employees who worked from home preferred to do so, often citing work-life balance and less time commuting as reasons," the Fed reports.

Across the nation, however, there remain gaps -- especially along racial or ethnic lines -- in access to basic financial services. Overall, 6% of adults did not have a bank account. That was much larger among some groups: 13% of black Americans and 11% of Hispanic adults were more likely not to have banking services.

ATTRACTING MILITARY VETERANS

As home to five military bases, Arkansas would be a natural state to attract service veterans looking to spend their retirement years. The state ranks near the middle of the pack in a recent study that evaluates 29 key metrics to help determine the states that are most comfortable for military retirees.

Just in time for the Memorial Day holiday, WallteHub has dropped a survey that ranks Arkansas 32nd in the nation for military retirees. The survey assessed state tax policies on military benefits, availability of jobs, health facilities and other socioeconomic factors.

In individual category breakdowns, Arkansas sat at 29th in both the economic environment and quality of life categories. It fell to 33rd in health care.

During his tenure, Gov. Asa Hutchinson has launched several initiatives to create a friendly home in the state for veterans and military retirees.

Home Base Arkansas, an interactive employment database designed to keep veterans working and living in the state, was started in November 2020 as part of an initiative that began in 2017 with legislation that exempted military retirement benefits from state income taxes.

Details on the state's resources for military veterans and their families are available at homebasearkansas.com.

BANK EXPANSION

First Security Bancorp has opened a new branch in Fort Smith, the bank's second in the city with plans to open a third in 2024.

The newest branch, at 713 Rogers Ave., is a $3 million investment from Searcy-based First Security, which opened the initial branch in 2018 in downtown Fort Smith. First Security now has 13 employees in the area.

First Security has zeroed in on Chaffee Crossing for the next branch, scheduled for a 2024 target opening. The bank, with more than 1,000 employees in Arkansas, and has assets of more than $6 billion.

NEW KENTUCKY HOME

Windstream Holdings Inc. has broken ground in Lexington, Ky., at a site to house regional headquarters for its Kinetic business division, which offers voice and broadband services to consumers in 18 states.

The building will house about 160 employees and will include training and reporting for field operations. Construction is expected to be complete by the end of 2022.

"When we say, 'High Speed for Here,' we're talking about investing for the long term in the communities that hold so much history for our company and also represent our future," Tony Thomas, president and chief executive officer of Windstream, said in announcing the new building. "That means deploying fiber, the best technology to future proof our network, and it also means investing in the workforce. We are pleased to be moving to the University of Kentucky's high-tech research campus."

Windstream says it will have fiber available in every county it serves in Kentucky over the next couple of years.

The 30,000-square-foot, energy efficient building will be located at 920 Citation Blvd. in the University of Kentucky's Coldstream Research Campus. The building, under a long-term lease by Kinetic, will also be equipped with charging station capabilities for electric vehicles.

Column ideas or recommendations? Thoughts or musings that need pursuing? Contact me at amoreau@adgnewsroom.com or at (501) 378-3567.

Print Headline: Fed report shows high level of household financial well-being last year

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