Ask Americans to name one word that describes the state of the economy in their lifetime and you will hear a catalog of woes.
“Terrible.” “Chaotic.” “Sad.” “Fighting.” “Scary.”
In our new Suffolk University Sawyer Business School/USA TODAY TODAY poll, three out of four people volunteered words that reflected worry and worse – surpassing the five people who said things were good, improving or worse at least fair. Economists admire the strong labor market and the “soft landing” that has, at least so far, moderated inflation without tipping into recession, but the view from the kitchen table is much less rosy.
“My interpretation of this data: There is no soft landing,” said David Paleologos, director of the Political Research Center in Suffolk.
By more than 3-1, 70-22%, respondents said the economy was getting worse, not better.
If economic statistics are good, why are Americans doing so badly?
Here are six results from the survey that help explain this discrepancy. The survey of 1,000 people, conducted Sept. 6-11 on landlines and cell phones, has a margin of error of plus or minus 3.1 percentage points.
Food prices are still high
Is inflation getting better? Americans don’t see it.
There is a national consensus that the cost of living is still rising: 84% said so. Just 4% said prices would fall, barely beyond the survey’s margin of error. Half of those who expect inflation to continue, 49%, cite food costs as the main cause.
Sixteen percent cited housing costs and 11 percent each referred to electricity bills as well as the price of gas and other transportation costs.
Private household debt is rising and savings are falling
As Congress debates how to deal with increasing red ink in the federal budget, many families are doing the same.
Four in ten respondents (39%) said their household debt had increased in the past year. That’s twice as many as the 18% who said it had fallen. Almost 9 in 10 said they don’t plan to buy or sell a home in the next 12 months, and more than a third of them cited the reason they simply can’t afford it now.
Thirty percent say they have had to cut into their savings to pay their bills, and nearly as many say they saved less money than usual last year. That’s a recipe for trouble later.
The pandemic aid has been used up
A 55% majority of Americans say they received federal stimulus money or other federal aid during the pandemic, and that was important to many of them. More than a third of recipients described it as “very important” to get through the worst of the pandemic; Another fourth called it “rather important.”
But three rounds of stimulus funding are over, and Congress rejected proposals to renew expanded aid to pay for child care. That’s one reason Census Bureau data released Tuesday showed child poverty more than doubled last year, from 5.2% in 2021 to 12.4% in 2022.
New clothing? An evening out? Forget it.
Most Americans have restricted some of their enjoyment of life because of concerns about the economy.
About 7 in 10 eat out less often and spend less on clothes. Nearly 6 in 10 delay home improvements and cancel vacations. More than half are spending less on groceries and trying to save on electricity bills by turning down the settings on their home thermometers.
Those with lower incomes are put under pressure
Americans earning less than $50,000 a year are hardest hit.
They are most likely to have their savings depleted and their household debt to increase. More of them received pandemic aid than those with higher incomes, and this aid was more important for them to make ends meet. They were twice as likely as high-income households earning more than $100,000 a year to report cuts in food spending.
Additionally, lower-income households were most likely to tell us that a family member had an addiction problem related to drugs, alcohol, or gambling. This situation and the stress it can bring affected 24% of those earning less than $50,000 per year, compared to 14% of those earning more than $100,000 per year.
Christmas is around the corner
For many families, Santa Claus will be cutting corners this year.
By 3-1, 44-14%, Americans say they plan to spend less, not more, on holiday shopping this year. Four in ten say they will spend the same.
This caution could also have an impact on the economy. Retailers are relying on consumer spending, including the traditional holiday wave, to boost their bottom lines.
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