How Americans Feel about the Economy and Recession 2022

Recession 2022

This article was last updated on June 14, 2022

Regarding recession 2022, a recent poll by the National Opinion Research Center at the University of Chicago with funding from the Wall Street Journal looked at how Americans feel about the current economic situation in the United States.

The interviews involved 1,071 adults between May 9th and 17th, 2022 and had a margin of sampling error of plus or minus 4 percentage points at the 95 percent confidence level.  Let’s look at some of the questions and responses:

1.) Would you describe the state of the nation’s economy these days as…?

Excellent – 1 percent

Good – 16 percent

Not so good – 55 percent

Poor – 27 percent

In total, 83 percent of respondents described America’s economy as poor or not so good, nearly 5 times as many as those who described America’s economy as excellent or good.

2.) During the last few years, has your financial situation been getting better, worse, or has it stayed the same?

Better – 24 percent

Worse – 38 percent

Stayed the same – 39 percent

3.) The way things are in America, people like you and your family have a good chance of improving your standard of living – do you agree or disagree?

Strongly agree – 4 percent

Somewhat agree – 22 percent

Somewhat disagree – 26 percent

Strongly disagree – 19 percent

In total, 46 percent of Americans felt that their families did not have a chance of improving their standard of living compared to 26 percent who believed that their families could improve their standard of living.

4.) In In general, do you think this is a good time, a bad time, or neither a good time nor a bad time to...

a.) Buy a home?

Very good – 3 percent

Moderately good – 38 percent

Neither good nor bad – 21 percent

Moderately bad – 34 percent

Very bad – 31 percent

In total, 65 percent of Americans felt that it was either a moderately bad or very bad time to buy a home compared to 13 percent of Americans feel that it is either a very good or moderately good time to buy a home.

b.) Invest in the stock market?

Very good – 3 percent

Moderately good – 18 percent

Neither good nor bad – 34 percent

Moderately bad – 26 percent

Very bad – 3 percent

In total, 44 percent of Americans felt that it was either a moderately bad or very bad time to invest in the stock market compared to 21 percent of Americans feel that it is either a very good or moderately good time to invest in the stock market.

5.) Thinking about your financial situation, how confident are you that…

a.) You could pay for a large expense such as a downpayment on a home or purchasing a new car?

Extremely confident – 8 percent

Very confident – 11 percent

Somewhat confident – 20 percent

Not very confident – 25 percent

Not confident at all – 35 percent

In total, 60 percent of Americans were either not very confident or not confident at all that they could pay for a large expense compared to 20 percent of Americans who were either extremely confident or very confident that they could pay for a large expense.

b.) You will have enough savings for retirement?

Extremely confident – 7 percent

Very confident – 10 percent

Somewhat confident – 26 percent

Not very confident – 27 percent

Not confident at all – 29 percent

In total, 56 percent of Americans were either not very confident or not confident at all that they will have enough savings for retirement compared to 17 percent of Americans who were either extremely confident or very confident that they would have enough savings for retirement.

c.) You would be able to pay an unexpected bill of $1000?

Extremely confident – 25 percent

Very confident – 16 percent

Somewhat confident – 21 percent

Not very confident – 15 percent

Not confident at all – 22 percent

In total, 38 percent of Americans were either not very confident or not confident at all that they would be able to pay an unexpected bill of $1000 compared to 41 percent of Americans who were either extremely confident or very confident that they would be able to pay an unexpected bill of $1000.

Let’s close by looking at some data which may help explain the pessimistic responses of Americans to their personal financial situation.  Here is what has happened to the personal savings rate over the past five years:

Recession 2022

The major increase in the savings rate in 2020 was due to the pandemic payments made to American households which has long since evaporated with the current savings rate of 4.4 percent being the lowest since September 2008.

Here is a graph from FRED showing that revolving consumer debt has reached a new all-time high of $1.103 trillion in April 2022 after falling back during the pandemic-related recession in 2020 and 2021:

Recession 2022

Here is a graph from FRED showing that nonrevolving consumer debt has reached a new all-time high of $3.464 trillion in April 2022:

Recession 2022

If you look at the Consumer Credit G.19 report for April 2022 released by the Federal Reserve, you’ll notice that growth in total consumer credit has far outstripped the headline inflation numbers over the period from February to April 2022 with revolving credit rising by up to 29 percent for the month of March 2022:

Recession 2022

With the rise in interest rates showing no sign of abating, America’s already beleaguered and pessimistic consumers are going to find themselves in an even more dire financial condition since their pandemic-related savings have disappeared and they have taken on debt like there is no limit to what they can spend.  Given that U.S. economic growth is pinned to spending by consumers, it is looking  increasingly likely that a consumer-driven recession lies just around the corner.

Recession 2022

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