Income Disparities and Age Groups Influence Perception
Interestingly, the survey data showed that the perception of a recession varied significantly based on income and age groups. Among individuals in the lowest-income households, making under $50,000 annually, 60% shared the sentiment that the economy is in a recession. In contrast, 61% of respondents from higher-income households, earning over $100,000 per year, agreed with this perspective.
Gen Xers, aged 43-58, exhibited the highest level of concern, with 65% of respondents in this age group believing that the U.S. is experiencing a recession. Millennials (ages 27-42) followed closely at 60%, while baby boomers (ages 59-77) and Gen Z (ages 18-26) registered slightly lower percentages of 58% and 55% respectively.
These findings suggest that economic sentiment is influenced by factors such as financial status, life stage, and generational experiences, highlighting the diversity of perspectives within the population.
Impact on Financial Situation
The survey also revealed that Americans’ perception of a recession aligns with their personal financial situations. A previous Bankrate survey showed that 50% of respondents believe their overall financial situation has worsened since the 2020 presidential election, lending credence to the concerns voiced in the recent survey.
According to the latest data, approximately two-thirds of Americans (66%) attribute their financial challenges to the current economic environment, which encompasses factors such as heightened inflation, rising interest rates, and income or employment fluctuations. It is worth noting that 85% of those who perceive the economy to be in a recession shared this negative sentiment.
Shifts in Financial Habits
The survey also highlighted changes in financial habits prompted by the economic environment. More than three in five adults (64%) reported altering their financial behaviors this year in response to prevailing conditions, with this number rising to 81% among individuals who believe the economy is in a recession.
Bankrate analyst Sarah Foster commented on the survey, stating, “Americans seem to be evaluating the economy with different metrics than experts. While economists focus on broad-based declines in growth, households prioritize their ability to meet needs, occasional wants, and pursue key financial goals, such as saving for emergencies and retirement.”
She further emphasized that individual experiences shape Americans’ perception of the economy’s strength, often diverging from national indicators. In other words, people’s personal financial circumstances may provide a more nuanced assessment of the economy’s health compared to broader economic measurements.