WASHINGTON (AP) -- The Federal Reserve has declared economic growth "solid." But several new reports show most Americans are treading along a dangerous financial tightrope, where one slip could be devastating.
Nearly half of U.S. households - 47 percent - say they spend all of their income, go into debt or dip into savings to meet their annual expenses, according to an analysis of Fed survey data released Thursday by the Pew Charitable Trusts.
"They could not withstand a serious financial emergency," said Diana Elliott, a Pew research manager who co-wrote the analysis. "That really is the contrast to the macroeconomic story" of a recovering economy.
"Macro indicators tell us a lot, but they don't tell us what is specifically happening within families," she said.
If a typical middle-class household had to weather a period of joblessness without any income, they would exhaust their available savings within 21 days, the analysis found. If that same family also cashed in all their retirement investments to get by, they would burn through those assets within four months.
Nor is there much flexibility in family budgets. Americans are devoting more of their income to housing, health care and personal insurance and pensions since 1984. After adjusting for inflation, their average annual expenses have risen 6 percent to $51,105 during that period. Their earnings have largely been flat for three decades - increasing only when factoring in government "transfers" such as tax cuts and Social Security checks.
The household numbers contrast sharply with broader economic indicators that tell a more upbeat story. According to those figures, the U.S. economy has roared back to life in recent months after muddling its way out of the Great Recession over the past seven years.
The unemployment rate has plunged to 5.6 percent from 6.7 percent over the past year. Gross domestic product surged at an annual pace of 4.8 percent in second and third quarters of 2014, with growth projected to be above 3 percent in the fourth quarter in a government report being released Friday.
Fed officials ended their January meeting on Wednesday by pronouncing the job gains as "strong" and growth as "solid," an unmistakable vote of confidence based on the broader data that has yet to fully translate for many families. Yet that same Fed statement indicated that the central bank would be patient in raising historically low interest rates that are designed to stimulate growth, a nod to the dire situation confronting many families.
A separate economic scorecard released Thursday reported that 55.6 percent of U.S. consumers have subprime or near-prime credit scores, meaning they must pay a premium to borrow if they qualify at all for traditional loans and credit cards. Roughly 20 percent of households must routinely depend on "fringe financial services" such as payday lenders, according to the report by the nonprofit Corporation for Enterprise Development. The scorecard evaluated economic opportunity in every state based on 67 different measures drawn from government and industry data.
"There is something to be said about thinking who the economy is improving for," said Kasey Wiedrich, director of applied research at the nonprofit.
Based on updated tax data released this week, the evidence is that the economy has improved for the 1 percent.
Including capital gains, they earned nearly 19 percent of all income in 2013, according to Emmanuel Saez, an economist at University of California at Berkeley. To be in the top 1 percent, a family had to earn at least $391,960. That's more than seven times the annual median household income of $54,417, according to Sentier Research.
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