As the economy has tightened and inflation impacts are setting in for the U.S. across the board, young Americans seem to be losing more sleep over their finances than older generations, according to a survey.
Financial services company Empower released a report this week, in which they asked a range of Americans about their happiness regarding their financial status. The August survey by Empower gathered answers from 2,000 Americans over the age of 18. (RELATED: Biden Blames The Press For Coining ‘Bidenomics’)
While roughly 73% of spenders and savers experienced financial stress, roughly 56% of Gen Z and 51% Millennials told the company that their financial situations “keep them up at night,” according to the report. Comparatively, only 37% of Gen X and just 20% of Baby Boomers were in agreement with the sentiment.
NEW YORK, NEW YORK – AUGUST 28: A customer shops in a Rite Aid store in Brooklyn on August 28, 2023 in New York City. Rite Aid, a national chain retail pharmacy and convenience store with thousands of locations across the country, is preparing to file for Chapter 11 bankruptcy as it faces increasing financial stress related to opioid lawsuits and other financial pressures. (Photo by Spencer Platt/Getty Images)
The future of the economy under Bidenomics seems to be trending downward as the newest economic indicators from October point to the U.S. entering a recession in 2024. The Leading Economic Index (LEI), which measures key economic components of the future health of the economy, dropped by 0.8% in October and 3.3% within the last six months.
“The two indicators that are most troubling are that (1) consumer expectations are low — this is a problem because consumption is 65-70% of national output — and (2) tighter credit conditions since income has not kept up with inflation and many households have exhausted their pandemic savings,” Chief economist and senior advisor for the Center for American Prosperity Michael Faulkender told the Daily Caller News Foundation.
“Therefore, they are reliant on credit to maintain their current consumption levels. Both of these point towards a pullback in economic activity, consistent with the reduction in retail sales that we saw in October.”
Although overall financial issues like being debt-free and retirement plans are stressing young Americans, their top issue seems to be housing, according to the Empower report. Sixty-seven percent of Gen Z and Millennials stated that higher home costs and mortgage rates are a top contributor to their stress. (RELATED: Middle-Class Millionaires?: Survey Reveals The Minimum Net Worth Americans Consider Wealthy)
Only 39% of adults under 39 own a property, according to Business Insider, adding that the low owning percentage was due to mortgage rates being too high to allow them to buy. However, the average contract rate on a 30-year fixed mortgage has been showing some signs of hope, declining by 20 basis points to 7.4% for the week that ended on Nov. 17, according to Reuters.
Economic pressures have also led to a decline in “people’s sense of prosperity,” with 81% of Americans feel the rising costs, 66% feeling interests rates, and 32% dealing with student loans, Empower reported. Across all generations, over half carry debt and 36% stated that an “unforeseen expense” over $500 would be something that they “could not handle” without worrying.
While many young Americans have taken on a large portion of debts, 67% of Gen Z and 59% of Millennials stated that they do not feel “financially ready to retire,” with Gen Z significantly trailing behind in making contributions to a retirement plan over other generations, according to the report.
Respondents also said their incomes can’t keep up with inflation, which is the case for 67% of Americans across all generations, with 42% stating that their “standard of living is declining,” the report noted.
The Biden administration has apparently been attempting to salvage the Bidenomics image after polls indicated that 70% of Americans did not believe that the economy was getting better following reports of unemployment lows and easing inflation. Members of the Progressive Change Campaign Committee (PCCC) reportedly met with Biden aides in September and October to advise President Joe Biden to address the “pain” of the economy and then “pivot” to the accomplishments of the administration.
“Democrats can’t just hammer people over the head with an insistence that the economy is great,” Adam Green, co-founder of the PCCC, told Politico. “We have to acknowledge pain and pivot, and there are ways that we can optimize that pivot to hit Trump for mismanaging the economy.”
Republican front runner and former President Donald Trump, however, has reportedly discussed an economic plan to double down on harsher trade policies, stating that he is seeking to put America first by rewarding “domestic production and taxes foreign companies and those who export American jobs,” according to Fox News.
Under the Trump administration economic ease was felt across board for Americans with nearly 76% of workers stating in 2019 that they believed that the economy was either “very or somewhat good” which was the highest it had been in nearly 20 years, according to a CNN poll.