Many experts predict 2022 will finally be the year when the economy starts rolling again. From investment banks like J.P. Morgan (“Our view is that 2022 will be the year of a full global recovery”) to the Federal Reserve (which is considering hiking interest rates), it seems like good times are right around the corner.
Too bad the American people don’t agree.
Two new polls show most Americans are skeptical or even fearful of the year ahead. Nearly 7 in 10 “expect a recession in the near future,” according to the Allianz insurance company, which released results of its poll of more than 1,000 adults this week. That number (67 percent) nearly matched the 64 percent who say their income isn’t keeping up with expenses – and they don’t expect it will keep up with tax increases.
Those results mirror the 2022 Wealth & Wellness Index – released the same day – that shows only about a third of Americans say they’re “very financially healthy,” which is a steep drop from March 2021, when nearly half described themselves that way.
This is also reflected in the ability to meet financial milestones – fewer adults were able to build an emergency fund (11 percent decrease) and consistently save (10 percent decrease).
Americans said the most common barriers to achieving financial health are lack of pay (30 percent) and the piling of expenses (30 percent). A staggering number of Americans quit their jobs this year (4.5 million people quit in November). Seventy-six percent of people said they left their jobs in search of higher pay and better benefits.
“It’s a complicated picture to describe what’s happening to the economy,” says Craig Birk, chief investment officer at Personal Capital. “The labor market is strong and retail growth is ticking upwards, but we’re also dealing with recent market volatility and record high inflation. It’s unsettling for many.”
That said, the Index found stubborn optimism among its 2,000 respondents: “When asked what their top new year’s resolution is, paying off personal debt (37 percent) and saving for retirement (36 percent) now surpass traditionally common goals like exercising more (33 percent) and losing weight (28 percent).”
Paying off personal debt is an even higher priority for Gen X (51 percent).
Of course, most New Year’s resolutions never get fulfilled – especially financial ones. Still, the determination impresses James Burton, the chief marketing officer at Personal Capital, one of the firms that sponsor the Index and a tech firm that offers financial investment advice.
“The fact that paying off debt is a higher priority than exercising shows many people want to improve their financial health,” Burton says. “Americans are seeking financial advice, and we don’t see this boom in financial planning changing anytime soon.”
Financial health and security are important issues to most Americans going into the new year and although the majority of adults feel that their finances are at risk, 40 percent are still hopeful for the future.
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