More than half of Americans (56%) already think the country is in a recession.
Americans who do not believe the U.S. is currently in a recession believe there is likely to be a recession in the next year (49%) compared with one third believing the economy will remain the same (33%).
The majority of Americans (80%) are concerned about the impact of a recession on their daily finances.
A “leaner” holiday season is expected with nearly a third of Americans expecting to spend less on gifts than in recent years.
Americans are more budget-conscious at the grocery store, limiting purchases due to inflation.
SPRINGFIELD, Mass.–(BUSINESS WIRE)–Despite many Americans believing that the U.S. is already in a recession, most remain optimistic about their financial futures. The latest Consumer Spending & Saving Index from Massachusetts Mutual Life Insurance Company (MassMutual) suggests that rising interest rates, high inflation, and stock market volatility have yet to dampen people’s views on their personal finances.
“It appears that even with market and economic uncertainty, Americans remain hopeful about their financial futures,” said Mike Fanning, head of MassMutual U.S. “It is encouraging to see that despite ongoing financial headwinds, the prevailing emotion is optimism. However, many Americans feel the pressure and may have their views tested in the second half of this year. Establishing good monetary habits can help people weather volatility and protect their loved ones’ immediate and long-term financial interests.”
Other notable findings include:
Inflation continues to weigh on Americans but has yet to upend their spending habits overall.
Fears around inflation increased slightly over the last three months, with 88% of Americans voicing concern about the inflationary environment as compared to last quarter (87%).
Despite these fears, over half expect their spending to remain the same in the near future (58%), which is consistent with Americans’ expectations year-over-year (56%).
Non-college educated Americans are adjusting their discretionary spending more than those with college degrees (60% vs. 53%).
The most common change is cutting back on everyday spending like groceries and gas.
Americans are limiting their grocery purchases due to inflation. Top categories where Americans are cutting back include beef (43%), packaged goods (37%), milk (19%), and eggs (23%).
Despite these challenges, Americans are more confident about their financial outlook than three months ago, especially Millennials.
Over two thirds (67%) of the U.S. population feels optimistic about their current financial outlook as compared to only 61% last quarter.
The current economy is not dampening millennials’ views of their financial futures with 32% feeling very optimistic compared to less than one third three months ago (29%).
Concern about the housing market is down from three months ago (46% vs. 54%).
Looking ahead: The midterms may push the U.S. political climate to the forefront of Americans’ concerns.
While inflation remains the top concern among all age groups (88%), the U.S. political climate was voted a close second (76%).
Many Americans anticipate a leaner holiday season compared to last year by making fewer discretionary purchases to streamline their spending.
38% of Americans plan to spend less this holiday season than they did last year.
The same percentage (38%) plan to spend the same amount as last holiday season.
“The latest findings from our MassMutual Consumer Spending & Saving Index reinforce what MassMutual is already hearing from customers: significant economic challenges have yet to erode Americans’ confidence in their futures,” says Fanning. “Practicing smart financial habits like spending within a defined budget, putting money aside, and investing for the future will help make Americans’ positive financial outlooks a reality.”
The MassMutual Consumer Spending & Saving Index tracks financial outlooks and behaviors in a changing economic environment. It offers an in-depth snapshot of people’s saving and spending behaviors and examines sentiment and attitudes toward navigating the financial impacts of the pandemic and the changing state of the economy with an emphasis on inflation, changes in interest rates and spending. Commissioned by MassMutual, the research was conducted online by PSB Insights from August 16-22, 2022 among a nationally representative sample of 1,000 U.S. adults (ages 18+) as well as an additional sample of 500 adult Massachusetts residents.
MassMutual is a leading mutual life insurance company that is run for the benefit of its members and participating policyowners. Founded in 1851, the company has been continually guided by one consistent purpose: we help people secure their future and protect the ones they love. With a focus on delivering long-term value, MassMutual offers a wide range of protection, accumulation, wealth management and retirement products and services. For more information, visit www.massmutual.com.
Media Contact: Paula Tremblay, MassMutual, firstname.lastname@example.org