A recent Bankrate survey found that nearly 6 in 10 Americans believe the U.S. economy is currently in recession, even though the sharp recession widely predicted by economists was avoided last year. I feel that I am.
The study found that this holds true across generations and income levels. Gen Xers and Millennials were the most likely to say the economy is in recession, at 65% and 60%, respectively.
But baby boomers and Gen Z aren’t far behind, with 58% and 55%, respectively, saying the economy is currently in a downturn, according to a late October Bankrate survey of 2,404 U.S. adults. is answering.
About the same percentage of low-income households (those making less than $50,000 a year) and high-income households (those making more than $100,000 a year) said they felt the economy was in recession.
But economists are now far more optimistic about the state of the U.S. economy than they were a year ago, when many were predicting a recession in the face of soaring inflation and rising interest rates.
Despite economists’ dire forecasts and weak consumer sentiment, the United States has boasted low unemployment, steady economic growth and declining inflation throughout the year.
According to the Labor Department, the unemployment rate for Americans was just 3.9% in October, just 0.4 percentage points above the pre-pandemic level of 3.5%. According to the Department of Commerce, the U.S. economy also grew at an annual rate of 5.2% in the third quarter.
Inflation has fallen significantly since peaking at 9.1% last summer, falling to 3.2% in October. Inflation remains above the Federal Reserve’s 2% target, but the central bank has kept interest rates unchanged for the past two consecutive meetings as the economy shows signs of cooling.
“Americans appear to be evaluating the economy on different metrics than experts,” Bankrate analyst Sarah Foster said in a statement.
“Economists are closely monitoring the broad-based decline in growth, but while households still have enough money left over to cover key financial goals such as emergencies and retirement savings, “The focus is on being able to meet your daily needs and occasional needs,” he added.
About 66% of Americans say the current economic environment has had a negative impact on their finances, and 64% said they have adjusted their financial habits in response, according to a Bankrate survey.
“Americans judge the strength of the economy by their own experience of living within it, and national numbers often don’t tell the same story as the public finances,” Foster said.
Although economists disagree about the causes of recessions, most agree that recessions are prolonged periods of low or negative economic growth accompanied by severe increases in unemployment. .
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