Nearly one-fourth of American adults said that they were worse off financially in 2020 compared to a year earlier, reflecting the economic fallout and distress resulting from the Covid-19 pandemic, a Federal Reserve survey revealed.
That was up from 14 per cent in 2019 and the highest share since the survey began collecting this information in 2014, according to the Fed's most recent Survey of Household Economics and Decisionmaking, released on Monday, reports Xinhua news agency.
"This increase occurred broadly across segments of the population, and likely reflects financial distress resulting from the pandemic," the Fed said.
Despite an increase in setbacks due to the pandemic, most Americans were still managing financially at the end of 2020, with three quarters of adults saying they were either "doing okay" financially or "living comfortably", the survey showed.
However, not all groups have fared similarly through the pandemic, and persistent disparities in well-being across education and race remained, the Fed noted.
For example, less than two-thirds of Black and Hispanic adults were doing at least okay financially in 2020, compared with 80 per cent of White adults and 84 per cent of Asian adults.
The gap in financial well-being between White adults and Black and Hispanic adults has grown by 4 percentage points since 2017.
Meanwhile, 89 per cent of adults with at least a bachelor's degree were much more likely to report doing at least okay financially, compared with 45 per cent for those with less than a high school degree.
This gap increased to 44 percentage points in 2020 from 34 percentage points in 2019.
"This new survey gives us valuable details about the financial challenges families have faced during the pandemic," Fed Board governor Michelle Bowman said in a statement on Monday.
"Even as the economy has improved, we can certainly see that some are still struggling, especially those who lost their jobs and those with less education, many of whom fell further behind. Helping families and communities was a central goal of the Federal Reserve's response to the pandemic," Bowman said.
Fed Chairman Jerome Powell said also earlier this month that the US economy is "not out of the woods yet", particularly with a slower recovery for low-wage and minority workers.
"The economic downturn has not fallen evenly on all Americans, and those least able to bear the burden have been the hardest hit," he said.
The Fed has pledged to keep its benchmark interest rates unchanged at the record-low level of near zero, while continuing its asset purchase program at least at the current pace of $120 billion per month until the economic recovery makes "substantial further progress".
