JPMorganChase Institute Research Shows More Than 90% of U.S. Households Are Able to Cover a $400 Emergency Shock

Today, the JPMorganChase Institute released new research examining Americans’ resilience to unexpected expenses. Leveraging aggregated data on cash balances, income, spending and credit access from 5.9 million households, the Institute’s report offers a more nuanced and comprehensive view of how households can manage unexpected expenses than survey-based reporting on American households’ financial health in recent years.

Economic context: There is a growing disconnect between American households’ perception of their financial health and the U.S. economy and the data undergirding it. Though the economy remains healthy by most measures and inflation is well below its peak, many Americans have a pessimistic view of the economy, with more than 50% believing that the U.S. is in a recession. Assessing the economy through a cost-of-living lens can provide insights into this discussion, especially in light of the fact that costs for many essential items continue to hover above pre-pandemic levels.

“Recent economic data has revealed conflicting perspectives about how Americans are faring financially, and how they view the health of the U.S. economy,” said Chris Wheat, president of the JPMorganChase Institute. “Understanding the full picture of household liquidity is essential to accurately evaluating the financial resiliency of both consumers and communities.”

A Closer Look at the Data: The report finds that most households have sufficient liquidity to weather moderate expense shocks, and that sources of liquidity beyond cash savings are the key to many households’ ability to weather an emergency expense. Key report findings include:

• American households are generally financially resilient in the face of unexpected major expenses. 92% of households are able to cover a $400 unexpected expense, including 77% of households in the lowest income quartile.
• Access to credit is crucial for households dealing with unexpected major expenses. 43% of low-income households that are unable to weather small unexpected expenses might be able to pay off such shocks with more available credit.
• Black and Hispanic households are more reliant on disposable income and credit to cover $400 expenses. Asian and White households are 10 percentage points more likely than Black and Hispanic households to be able to cover a $400 expense shock using just available cash.

Why It Matters: Determining the factors that impact a household’s ability to pay, and then setting households up with the proper tools and access, is critical to ensuring Americans can weather emergency expenses.

The JPMorganChase Institute aims to provide decisionmakers with timely data and thoughtful analysis to make more informed decisions that advance prosperity for all. For more insights on the inner workings of the economy, including on topics related to business growth and entrepreneurship, careers and skills, community development and financial health and wealth creation, visit https://www.jpmorganchase.com/institute.

About JPMorganChase

JPMorganChase (NYSE: JPM) is a leading financial services firm based in the United States of America (“U.S.”), with operations worldwide. JPMorganChase had $4.1 trillion in assets and $337 billion in stockholders’ equity as of March 31, 2024. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing and asset management. Under the J.P. Morgan and Chase brands, the Firm serves millions of customers in the U.S., and many of the world’s most prominent corporate, institutional and government clients globally. Information about JPMorganChase is available at www.jpmorganchase.com.

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