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Fewer Parents “Doing All Right Financially”

The percentage of U.S. parents who say they are “doing all right financially” declined last year, according to new data from the Federal Reserve (The Wall Street Journal, subscription).

What’s going on: “About 64% of parents living with children under the age of 18 said they were doing all right financially in 2023, down from 69% in 2022, according to a survey released Tuesday by the Federal Reserve.”

  • Some 72% of respondents in general reported the same. That’s down just one percentage point from the year prior.
  • In a bright spot, a small percentage—31%—said they were worse off financially than they had been the previous year, down from 35% in 2022.

Why it’s happening: More than one-third of survey respondents cited inflation as their top financial challenge—and some households with young children said they spent almost as much on child care as they did on housing.

  • The median household using child care services reported spending $800 a month on it.

What it means: “The responses represent how much the ground has shifted since 2021, when households were flush with cash from pandemic stimulus checks. Inflation was starting to rise that year, but at the time, many households—not to mention Fed Chair Jerome Powell—still viewed it as a short-term blip.”

  • Also, a short-term child care tax credit expired at the start of 2022.

Concerning correlations: Parents with young kids were more likely to experience hunger than the general respondent population, with 11% reporting that they either sometimes or often lack sufficient food.

What manufacturers are doing: Manufacturers are working to help lift child care burdens. Read our stories on some of the creative and generous offerings of Toyota, Pella Corp., Vermeer and Wisconsin Aluminum Foundry, and how they’re helping get parents back in the labor force.

  • And read our case study on what pharmaceuticals manufacturer Abbott did to help its employees with child care.
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