More Americans Say They Are Worse Off Financially Than Any Other Time Since The Great Recession

Ben ZeisloftFebruary 9, 2023

Americans are now more pessimistic than ever about their finances, especially since the Great Recession. Economic Such challenges include Inflation This has been true throughout the year.

About 50% of respondents to Gallup Survey They are, they said. “financially worse off” Comparing to one-year ago, 35% feel they are. “financially better off,” The poll’s most disappointing results since 2008 and 2009, when the economy crashed, were the ones that mark the bottom of the heap. Low-income Americans were most likely to say that their situation is worse than it was last year. About 61% expressed pessimism regarding their financial situation in 2023, and 41% did the same this year.

The partisan divide in financial well-being perceptions is clear: 61% of Republicans believe they are better off than 37% of Democrats. Americans are more optimistic when their party’s administrations offer them a better view of their finances.

These results follow a volatile last year, in which the economy was hit hard by inflationary pressures as well as labor shortages and supply chain bottlenecks. This led to negative economic growth for the first two quarters. According to the December 2022 report, headline inflation for the year was 6.5%. Data The Bureau of Labor Statistics reported that the inflation rate has fallen from 9.1% in June 2022.

During the State of the Union, President Joe Biden highlighted this fact Address Tuesday’s inflation chart showed that the current rate of inflation, at 1.4% in his first month as president, is on the decline. “Inflation has been a global problem because of the pandemic that disrupted supply chains and Putin’s war that disrupted energy and food supplies. But we’re better positioned than any country on Earth,” He commented. “Food inflation is coming down. Inflation has fallen every month for the last six months while take home pay has gone up.”

While nominal wages increased as companies raised pay to draw more employees, there was a decline in real wages of 1.7% in the country between December 2021-2022 according to Data Source: Bureau of Labor Statistics. The inflation effect on household purchasing power is the second metric.

One of the reasons for pessimism about current finances is also one of the Worst The stock market has been experiencing a boom in recent years. The S&P 500 Index fell 20% last year. This is comparable to the 37% drop that was experienced in 2008 after the collapse in the banking system and the 12%, 22% and 22% falls that were witnessed in 2001 and 2002, respectively, during the dotcom bubble. Accordingly, retirement account values have dropped 20% Plummeted 25% for the first three quarters.

Gallup’s survey respondents were optimistic about their financial prospects in the future. 60% think their finances will be fine. “better off” One year from now, 28% think their finances will be “worse off.” Gallup stated that Americans are the most successful people in America. “remain optimistic about the year ahead for their financial situations, which they typically are, almost regardless of recent economic conditions.” A steady optimism that leads to strong consumer behavior could be the result. “help to minimize or avert an economic recession.”

While most economists predict a recession in the coming year due to economic problems, many others still believe that the United States can avoid a contraction. Michael Hartnett, Chief Investment Strategist at Bank of America, stated in a Report Before markets achieve a recovery, a recession could occur in the first quarter of the year. “much more solid footing,” While an Outlook Jan Hatzius, Goldman Sachs Chief Economic Officer, noted that analysts at the company believe “there are strong reasons to expect positive growth in coming quarters.”