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Majority of Americans Perceive U.S. Economy as in Recession, Bankrate Survey Finds

Although the U.S. economy may not technically be in a recession, a recent survey by Bankrate reveals that 59% of U.S. adults believe it is. This sentiment is shared across income brackets, with 60% of respondents in the lowest-income households (under $50,000 annually) and 61% in higher-income households (over $100,000 annually) expressing the belief that the economy is in a recession. The survey delves into age groups, indicating that Gen Xers (ages 43-58) are the most likely to perceive a recession at 65%, followed by millennials (ages 27-42) at 60%, baby boomers (ages 59-77) at 58%, and Gen Z (ages 18-26) at 55%.

Impact on Households and Financial Habits

The perception of a recession is not just a feeling; it aligns with the financial experiences of many Americans. Another Bankrate survey revealed that 50% of respondents feel their overall financial situation has declined since the 2020 presidential election. The latest findings indicate that 66% of Americans feel the current economic environment, characterized by factors like elevated inflation, rising interest rates, and changes in income or employment, has negatively impacted their finances in 2023.

Influence on Financial Habits

The economic sentiment has prompted changes in financial habits for a significant portion of the population. About 64% of adults stated that they have altered their financial habits this year due to the economic environment. This percentage increases to 81% among those who believe the economy is in a recession. The adjustments in financial behavior include decisions related to spending, saving, and pursuing key financial goals.

Individual Experiences vs. Broad Economic Metrics

Sarah Foster, an analyst at Bankrate, noted that Americans evaluate the economy based on personal experiences and metrics different from those monitored by experts. While economists look for broad-based declines in growth, households focus on their ability to afford necessities and occasional wants, along with meeting financial goals such as saving for emergencies and retirement. Foster highlights the discrepancy between nationwide economic indicators and the lived experiences of individuals.

In conclusion, the survey findings underscore a prevalent perception among Americans that the U.S. economy is in a recession, reflecting the impact of economic factors on personal finances. The alignment of this perception across various demographics highlights the shared economic concerns cutting across income levels and age groups.

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