More consumers are concerned about being able to pay their bills today than back during the Great Recession in 2008, according to the results of a recently released poll. Perhaps causing the problem is that a large number of consumers believe the economy is currently in a recession when it actually isn’t.
Nearly 40% of American adults are worried about their family’s income not being sufficient to cover expenses. This concern has risen significantly from 28% in December 2021 and is on par with levels observed during the Great Recession.
The Big Picture: Despite low unemployment and cooling inflation rates, the financial strain from past price increases continues to burden households. The typical household is now spending $925 more per month compared to three years ago, according to Moody’s Analytics. This inflationary pressure is evident in the responses, with 65% citing expenses and the cost of living as the most significant economic problem they face.
Demographics: The anxiety is particularly pronounced among Latino and African-Americans, with 52% and 46%, respectively, expressing constant worry about making ends meet. Additionally, more than half of those earning less than $50,000 annually share these concerns, highlighting the disproportionate impact on lower-income groups
Coping Strategies: In response to these economic pressures, many Americans have adjusted their lifestyles. The poll indicates that 35% have taken on additional work. Furthermore, a significant portion of the population has cut back on discretionary spending, with 69% reducing expenditures on extras and entertainment, and 68% changing their grocery shopping habits to stay within budget.
On average, consumers believe the economy went into recession in March 2023 and will stay there until next summer. Inflation and the rising cost of living (68%) tops the list of reasons why consumers believe the economy is in a recession, followed by friends and family members complaining about money (50%).
