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Slow improvement for middle class

By Jonathan Sweet

Those in the industry like to describe boating as a middle class activity and the struggles of that group have hindered a full recovery for the boating industry.

(I would make the argument that while boating remains a middle class activity, boat buying has increasingly become an upper class activity -- but that's a subject for another blog.)

With that in mind, there is some good news (but also some worrisome numbers) in a recent report from the Federal Reserve, Report on the Economic Well-Being of U.S. Households in 2015.

According to that report, after years of being battered during and following the Great Recession, the Middle Class is making slow but steady progress.

The 2015 survey was conducted in October and November of last year.

Some notable positive trends:

  • 69 percent of adults report that they are either “living comfortably” or “doing okay,” compared
    to 65 percent in 2014 and 62 percent in 2013. That number is up to 80 percent for college graduates.
  • 27 percent of respondents said their financial prospects had improved, while 19 percent thought the opposite
  • More households are putting money into savings, with 70 percent of households reporting saving money in 2015, up from 49 percent in 2013
  • 51 percent believe their home is worth more than it was a year ago, with a large variation by region. For example, 67 percent of those in the Pacific region see their home as worth more, while only 40 percent of those in the East North Central states (think Rust Belt) believe that.

There are also several challenges:

  • 46 percent of adults say they either could not cover an emergency expense costing $400, or would cover it by selling something or borrowing money.
  • 23 percent of respondents expected their income to increase in 2016, down from 29 percent in the 2014 survey
  • 26 percent reported being turned down for credit during the year
  • 51 percent have carried a balance on a credit card at least "some of the time" during the year
  • Of those who attended school beyond high school, 41 percent borrowed money to do so. The average debt for those borrowers was $32,585.
  • 31 percent of non-retired individuals have no retirement savings

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