Survey Reveals Widespread Perception of Economic Downturn
A recent survey conducted by Bankrate has revealed that despite the U.S. economy not technically being in a recession, a significant majority of Americans believe that it is. The survey found that 59% of U.S. adults feel like the economy is in a recession, which is traditionally defined by two consecutive quarters of negative growth.
Income Does Not Influence Perception
Interestingly, the survey also found that the perception of a recession is consistent across households of different income levels. Regardless of income, households reported feeling the pressure at about the same rate. Even among the lowest-income households, making under $50,000 a year, 60% said they believe the economy feels like it is in a recession. Similarly, 61% of respondents in higher-income households making more than $100,000 annually agreed with this sentiment.
The survey also revealed a generational divide in the perception of a recession. Gen Xers, aged 43-58, were the most likely to say that the U.S. is in a recession at 65%, followed by millennials (ages 27-42) at 60%, baby boomers (ages 59-77) at 58%, and Gen Z (ages 18-26) at 55%.
Impact on Families and Individuals
Households with children under the age of 18 were the most likely to express the belief that the economy is in a recession, with 66% sharing this view. Meanwhile, 63% of parents with children aged 18 or older agreed, along with 54% of adults with no children.
A separate Bankrate survey conducted earlier this year lends weight to these perceptions, with 50% of Americans stating that their overall financial situation has declined since the 2020 presidential election.
Negative Impact on Finances
The survey findings indicate that nearly two-thirds of Americans, or 66%, believe that the current economic environment, which includes factors such as elevated inflation, rising interest rates, and changes in income or employment, has negatively impacted their finances this year. Furthermore, 85% of those who believe the economy is in a recession share this sentiment.
Changing Financial Habits
The survey also revealed that a majority of Americans, over three in five adults (64%), have altered their financial habits this year in response to the economic environment. This percentage jumps to 81% among those who believe the economy is in a recession.
Sarah Foster, an analyst at Bankrate, offered insight into these findings, stating, “Americans seem to be evaluating the economy with different metrics than experts. While economists are watching carefully for broad-based declines in growth, households focus on whether they can afford their needs and the occasional wants while still having enough money left over to put toward key financial goals like saving for emergencies and retirement.”
It is clear that Americans judge the strength of the economy based on their individual experiences, and the nationwide numbers often do not align with their personal financial situations.