The Economy Is Booming. So Is Financial Stress.
Even after a decade of recovery, family balance sheets show that gains in security have been narrow while exposure to downturns remains broad.
Sign of the times.
Photographer: Brendan Smialowski/AFP/Getty ImagesFederal Reserve research provides lots of useful data about U.S. financial health, but its broad focus sometimes obscures intriguing specifics. Now a new study by the St. Louis Federal Reserve Bank has dug beneath the national averages to take a close look at family balance sheets. In a paper called "The Unequal Recovery: Measuring Financial Distress by ZIP Code," researchers cleverly analyzed the big numbers to identify financial distress among households.
The authors considered two periods since the end of the financial crisis: 2010-2015 and 2015–2018. The first period, early in the recovery from the wreckage of 2008, was characterized by economic uncertainty and doubt. During the later three years, by contrast, the recovery was becoming so robust that the Fed thought it was prudent to begin raising interest rates.