Parents are feeling the worst about their finances in nearly a decade  and experts say stubborn inflation is to blame.  

In a possible blow to President Joe Bidens reelection bid, the percentage of parents with kids under 18 that felt OK financially fell to 64% last year, compared to 69% in 2022, the Federal Reserve reported on Tuesday  the lowest level since data collection began in 2015.

Overall, the share of US households that said their financial health was OK fell to 72% last year, the lowest since 2016, according to the study.

The figure ticked down from 73% in 2022 and 78% when Biden took office in 2021.

The Fed survey of 11,000 adults, conducted in October of 2023, found that 35% said price hikes were the main source of financial worry, up from 33% the previous year.

If you look at consumer confidence, its been trending down significantly, Dr. Sung W. Sohn, professor of finance and economics at Loyola Marymount Universitys College of Business Administration, told The Post.

Inflation hit a whopping 9% in June 2022 before gradually falling to just below 4% by the time the survey was taken. Inflation has remained surprisingly sticky this year, forcing the Fed to put off a much-anticipated cut to the 23-year-high interest rate.

The Consumer Price Index came in at 3.4% for April, above the Feds 2% target rate.

The survey found that 65%  said that high prices have made their financial situations worse, while just 34% said their familys monthly income has risen in the past year.

Roughly 38% of respondents said they increased their spending over the course of the last 12 months.
Sohn said it was reasonable for parents with young children to feel negatively about the economy.

Adults with children children need a lot of things and they want a lot of things, Sohn said.

In this inflationary environment, you cant give everything the children want, so you can see why the parents with young children feel pretty bad about the economic situation, especially inflation.

The survey also found that 63% of adults said they could cover a hypothetical $400 emergency expense using cash or its equivalent the same as in 2022 but down from a record high of 68% in 2021.

Rental costs proved to be particularly challenging for households, the survey showed.

Nearly one in five (19%) said they fell behind on rent at some point in 2023 up from 17% the previous year.

The cost of rent has been the main driver of inflation. The median monthly rent rose 10% to $1,100 significantly outpacing the consumer price index over the course of the 12 months preceding when the survey was taken.

The Fed survey also found that more people were worried about price increases.

The share of respondents who reported that price hikes were the main source of financial worry rose from 33% in 2022 to 35% last year.

By comparison, just 8% of those surveyed in 2016 said that price increases were the key source of financial challenges.

Investors are optimistic the central bank will start cutting rates in September, but Fed Governor Christopher Waller said Tuesday that inflation needed to cool over the next three to five months.

If the data were to continue softening throughout the next three to five months, you can even think about doing it at the end of this year, Waller told CNBC.

If we get enough data going the right way, then we can think about cutting rates later this year, beginning of next year.