Nationwide’s 2023 Economic Impact survey is complete. It finds that a high percentage of Americans are very worried about the U.S. economy.
- 68% think we’ll see a recession in the next six-months
- 80% of that 68% think that recession will be severe
- 62% of that 80% think it will be much worse than the Great Recession of 2007 to 2009
Just 16% consider the U.S. economy is in good shape, and call it in good or excellent shape. That’s an 8-point drop from the September 2022 survey. Those thinking things are dire for the future of the country base it on rising interest rates.
- 70% worry about those high interest rates
- That’s a 9% rise from the 61% thinking that in September of 2022
- 38% think the Federal Reserve needs to back off an drop those rates
Nationwide’s Chief Economist is Kathy Bostjancic. She’s not surprised that consumers and business want rates dropped.
“Despite elevated inflation, trouble in the banking sector, and 10 consecutive interest rate hikes, we continue to forecast a moderate recession in the second half of this year, which stands in contrast to fears that we’re heading for another Great Recession,” she said. “Consumers are understandably worried, but consumer and business debt burdens are much less than they were 15 years ago and that should limit the degree of the economic downturn.”
Inflation is one of the drivers of the recession worries and consumers are making a lot of tradeoffs to manage it in their lives.
- 82% reporting they are concerned about inflation and rising living costs
- That’s up 5% from September of 2022
- As a result, 57% responding to the survey say they’ve dipped into savings to pay for everyday expenses within the past 12 months
- For Generation Z that figure is even higher at 64%
- Millennials peg that rate at 66%
Nationwide’s survey finds Americans have made other sacrifices, or important financial decisions in the past 12 months because of rising inflation:
- 54% are eating out less
- 37% are driving less
- 32% have delayed making major purchases
- 23% are relying more on credit cards to survive
- 23% are trying to find ways to save money on insurance premiums
- 20% are looking for better paying jobs
- 11% are cutting back on retirement plan payments
- 10% are cutting back on what they’re paying on current insurance policies
Nationwide’s survey finds that this is signaling that consumers are putting financial goals on hold because of inflation. Those goals are:
- Saving for retirement — 44%
- Paying off debt — 44%
- Building credit — 24%
- Saving for large purchases — 22%
The survey also found that Americans — especially those in in younger age groups — may not be managing their finances in the best possible manner.
- 70% aren’t using a financial advisor
- 46% say using a financial advisor costs too much
- 37% say they don’t have enough assets to use a financial advisor
- 22% say they don’t know who to go to for financial advice
So who are they using if they’re not using a financial advisor?
- Overall, 48% use friends or family
- For generation Z, 66% use friends or family for financial planning
- Online resources are the choice for 26%
- For millennials that number is 34%
Source link: Nationwide — https://bit.ly/3BPmign