10 Stats Exposing Economic Fears Among Americans
According to financial experts, it’s undeniable: The rate of inflation has significantly declined. However, that doesn’t mean things are suddenly cheaper, and a substantial number of Americans continue to be worried about an unsteady economy that could hurt their finances.
The following statistics shed light on why the public’s perception of the nation’s economic condition diverge from expert analyses.
1: Rising Food Costs
According to polls, 67% of Americans say inflation is impacting food prices more than any other area, and a majority (71%) say they plan to eat out less in order to keep their bills down. Economists say it’s not inflation that’s causing the rise in prices as much as it is food industry worker shortages and subsequent wage increases.
2: Housing Costs
In many areas of the country, the cost of a single-family home continues to increase. According to the National Association of Realtors, single-family home prices in the second quarter of 2023 alone saw a 53.8% increase in 221 metro areas. Renters are also witnessing a steady rise in costs.
3: Utility Costs
The cost of utilities like gas and electricity are rising throughout the country. Surprisingly, wholesale power costs are down. However, experts say there is a lag between wholesale decreases and the prices consumers see, which means residential heat and power costs are still high.
4: Transportation and Gas
Over the past several years, the cost of gas and jet fuel have seen big increases. Americans are paying more to drive their cars, utilize public transit, and fly, often creating significant economic hardship.
5: Vacations Postponed
A majority of Americans (68%) say that rising costs have forced them to cut or dial back their vacation plans. While many gave up their vacations entirely, others made major changes, like choosing a destination within driving range rather than relying on air travel.
6: Less Clothing Purchases
Over two-thirds of Americans (68%) said they have cut down on clothing purchases. Walmart and Target both reported low apparel spending in 2023.
7: Delayed Home Improvement
Well over half of Americans (57%) say they’ve had to cancel or delay home improvements. Home renovation spending is expected to continue to decrease into 2024 as home sales drop and interest rates rise.
8: Rising Interest Rates
Federal interest rates began rising in March 2022. Rising rates meant mortgages and other consumer loans became unaffordable for many Americans. By the end of 2023, the average 30-year mortgage rate was over 8%.
9: Overall Cost of Living
Surveys say most Americans agree the overall cost of living is going up. This may be why some are using words like “horrible,” “awful,” and “shambles,” to describe the economy.
10: It’s Going to Get Worse
One poll showed the majority of voters (62%) believe inflation will continue to rise going forward. Close to a quarter of Americans believe the US is set to enter a recession.
Many Economists Disagree
While the general population has a dismal view of the current economy, experts say things are getting better. Traditional indicators like the overall inflation rate and unemployment rate look good compared to previous years. Inflation is expected to decrease over 2024, with expectations that it’ll arrive at the Federal Reserve’s 2% target by the end of the year.
Especially Salient
However, inflation rates and unemployment rates mean little to regular consumers who are paying far more for groceries than in 2020. Economists say that food prices are especially salient, meaning people notice them readily, and they contribute strongly to negative public perception.
Possible Recession
Many forecasters have also predicted the Fed’s tightening will land the US in a recession. Hearing about recession possibilities fuels negative public sentiment around the economy.
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