Nearly 40% of Americans now worry they can’t pay their bills, which is higher than during the Financial Crisis when it was 37%.
Nearly four in ten of US adults say they worry most or all of the time that their family’s income won’t be enough to meet expenses, according to a new CNN poll.
That’s up from 28% who expressed those concerns in December 2021, and it’s similar to the numbers seen during the Great Recession (37%).
American are taking on side jobs, cutting back on driving, and putting even more expenses on credit cards to make up for it.
The poll data reveals that a disproportionately high percentage of Latino (52%) and Black (46%) Americans report feeling worried most or all of the time about making ends meet.
Additionally, over half (55%) of those earning less than $50,000 per year express similar concerns about having sufficient funds to cover their expenses.
These findings underscore how the impacts of rising prices and the cost of living are being felt acutely by many Americans, despite broader national economic indicators like low unemployment and moderating inflation.
For example, an Ohio resident named Angela Russell, who works at the CDC and has a family to support, recently had to relocate to a more affordable rural area due to the high cost of living in her previous rental home in Cincinnati.
The survey data also shows that two-thirds of Americans (65%) now cite expenses and the cost of living as the biggest economic problem facing their households, down from 75% last summer but still significantly higher than the 43% who mentioned such issues in the summer of 2021.
“The pressure is real.
Everything is so much more expensive than it was four years ago. It’s astronomical what you’re paying,” said Russell.
“We can talk all day about how inflation is moderating but the cumulative impact of several years’ worth of inflation has done a number on household budgets,” said Greg McBride, chief financial analyst at Bankrate.
“The view from 35,000 feet is unemployment is low, the economy is growing and people are spending money.
The reality on the ground is moderating inflation doesn’t mean prices are coming down, just that they aren’t going up as fast.”
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Other Economy News Today
Goldman Sachs now increases the odds of a recession happening due to the most recent job report and assessment.
Even the most optimistic observers of the U.S. economy are now taking the latest jobs data seriously.
A team of economists at Goldman Sachs, led by Jan Hatzius, has increased their assessment of the probability of a U.S. recession in the next 12 months from 15% to 25%.
This revised outlook comes after the release of a July employment report that the Goldman team described as “weak across the board.”
In the past, the Goldman economists have consistently downplayed the risk of an economic downturn.
However, the disappointing nonfarm payrolls data released on Friday has reignited concerns that the Federal Reserve may not be able to lower interest rates quickly enough to prevent a recession from occurring.
This reversal in sentiment from one of the U.S. economy’s biggest cheerleaders underscores the growing worries about the country’s economic trajectory.
Goldman now expects the central bank to cut borrowing costs by 25 basis points in September, October, and December, although Hatzius believes investors shouldn’t feel too concerned, pointing out that policymakers can always slash more aggressively if necessary.
There’s also a decent chance weak job numbers for July end up being a one-off rather than the start of a “new trend,” according to the economists.
“It is usually a mistake to infer too much from one jobs report absent a major shock that abruptly changes the picture,” they said, adding that much of the weakness last month was a result of temporary rather than permanent layoffs.
Other Wall Street economists are anticipating an even more dovish shift from the Federal Reserve, with the CME FedWatch tool indicating over 99% odds of a 50-basis-point rate cut in September.
Investors appear to be growing increasingly concerned about the latest disappointing jobs data, with the S&P 500 and Nasdaq both experiencing significant declines of around 3% on Monday following the report’s release.
Similar to the Goldman Sachs team, Dennis DeBusschere, the chief market strategist at 22V Research, believes the underlying economy remains relatively healthy.
However, he warns that a short-term market selloff is likely as investors grapple with the implications of the weak July jobs numbers.
DeBusschere cautioned that while recession risk remains low, albeit higher than the prior week, it would not be prudent for investors to try and capitalize on this view in the near term.
This suggests he expects market volatility and uncertainty to persist as the economic data is re-assessed.
Also Read: A US Bank is Now Denying Customers Access to Money
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