How are Americans doing financially?
Last week, we talked about how people felt about the economy. Now let’s zoom in: How do people feel about their personal finances? The Federal Reserve tracks Americans’ sentiment about their financial situations, including their main financial challenges, and it turns out people are feeling the pinch of higher prices.
- In 2025, 28% of US adults reported being worse off financially than the previous year. This is similar to 2024, when 29% of adults reported being worse off, but down from 35% in 2022.
- The share of Americans who say they are doing okay or better financially has remained near 73% since 2022, down from a recent high of 78% in 2021.
- Price increases were the top financial challenge among adults last year, with 91% reporting them as a concern. Saving for retirement was the second most common challenge: 72% of Americans reported it as a concern.
- Eighty-six percent of people with at least a bachelor’s degree reported doing at least okay, compared to 64% of people with high school diplomas or GEDs and 41% of people who didn’t finish high school.
- Over the 13 years of available data, Asian adults consistently reported the highest rate of financial security, followed by white adults. Black and Hispanic adults reported the lowest rates.
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How much debt does the US have?
The federal government had $38.5 trillion in debt as of 2025. If you can’t wrap your mind around that number (which is understandable), it comes out to about $112,700 per person. When the federal government spends more than it brings in, a budget deficit occurs. The government then borrows money by selling bonds and other securities to cover the deficit. Generally, the federal debt is an accumulation of budget deficits over time. So, how has the debt changed?
- The federal debt grew to $39 trillion by April 2026, 4% higher than April a year prior after adjusting for inflation, and 36% higher than in 2019.
- Federal debt per person has increased at an average rate of 5% annually since 2001.
- Analyzing debt relative to gross domestic product (GDP) makes it easier to track debt alongside economic and inflationary changes. It can also indicate the nation’s ability to repay its debt. When gross debt reaches 100% of GDP, it indicates that the country owes as much as its economy generates annually. In a dataset dating back to 1980, debt first surpassed 100% of the nation’s GDP in the fourth quarter of 2012. (Gross debt includes money the government borrows from itself plus debt held by the public, meaning Federal Reserve, US households and businesses, and foreign entities. Gross debt’s)
- The nation’s debt as a percentage of GDP reached a peak of 133% in the second quarter of 2020. As of Q4 2025, the debt-to-GDP ratio was 123%.
- The government must pay interest on its debts just as people pay interest on credit card bills, for example. Debt interest payments comprised 13.8% of government spending in fiscal year 2025 — nearly $1 trillion. Interest payments change based on the debt’s balance and current interest rates.
Data behind the news
President Trump has named Federal Housing Finance Agency (FHFA) Director Bill Pulte as acting director of national intelligence. (He will also remain as FHFA director.) Learn more about the Office of the Director of National Intelligence.
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One last fact
The US inflation rate, a measure that considers costs for everything from healthcare to gas to food, was 3.8% as of April 2026. Transportation prices rose by 7.1% from April 2025, housing costs rose 3.6%, and food/beverage costs rose 3.1%.
