In the face of a strong job market and consistent economic growth, a majority of U.S. citizens are under the impression that the country is experiencing a recession, a recent survey by Bankrate has revealed.
What Happened: According to a report by The Hill on Dec. 6, 2023, the Bankrate survey found that nearly 60% of Americans believe the economy is in a slump. This sentiment cuts across generational and income lines, affecting around 65% of Generation X, 60% of Millennials, 58% of Baby Boomers, and 55% of Generation Z.
This perception of the economic downturn was prevalent among both lower and higher-income households, earning below $50,000 and above $100,000 respectively. Despite this pervasive sentiment, economic experts maintain a positive outlook on the U.S. economy, especially compared to last year when high inflation and increasing interest rates fueled recession forecasts.
Bankrate analyst, Sarah Foster, stated that “Americans seem to be evaluating the economy with different metrics than experts.”
She elaborated that while professionals look for widespread declines in growth, households are more concerned with affordability and financial security. The survey revealed that 66 percent of Americans feel that the current economic climate has negatively affected their finances, prompting 64 percent to modify their financial behaviors.
Why It Matters: This perception of an economic recession among Americans comes in the wake of predictions by investment by investment firms like BMO Capital Markets and Deutsche Bank DB of a potential U.S. recession by the end of 2024. Despite the consensus of continued growth and solid stock gains, these firms foresee a slowdown in economic growth, albeit with a 12% rise in the S&P 500.
Furthermore, forecasts from major financial institutions for the stock market in 2024 range from potential economic downturns to the continued strength of the bull market. BCA Research predicts a significant downturn for the S&P 500 in 2024, anticipating a recession in both the U.S. and euro area.
Read Next: US Sees Deflation For First Time In Three Years, Paving Way For Fed’s 2% Inflation Target
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