MILWAUKEE — Two-thirds of U.S. adults expect that the economy will enter into a recession later this year, and among those anticipating a recession, three out of four expect it to have a high or moderate impact on both their near-term and longer-term finances, including residential remodeling.
That is among the key findings of a major new survey exploring Americans’ attitudes and behaviors toward their finances in the face of current economic conditions. The survey was conducted earlier this year among 2,740 U.S. adults aged 18 or older by The Harris Poll on behalf of insurance and investment-services giant Northwestern Mutual.
For those who see a recession looming, one-third (33%) of those surveyed believe it will be short-lived, lasting a year or less, while one-fifth (19%) say it will last more than two years. Despite the Federal Reserve’s campaign to fight inflation by raising interest rates, more than half (54%) of Americans say they expect inflation to increase this year, compared to 19% who say it will decrease, and 27% who say it will stay the same.
According to the research, most Americans are responding to the current economic uncertainty by adjusting their financial priorities and choices. The top three steps people are taking include cutting costs (64%), accumulating savings (50%), and postponing large expenses until the economy is on more stable footing (41%).
“Consumers want to know if their wealth-building plans and their lifestyles will remain on track if the economy pulls back, and many are taking positive steps to prepare for whatever economic season may come,” said Christian Mitchell, chief customer officer at Milwaukee-based Northwestern Mutual.
Economic uncertainty is leading the majority (60%) of surveyed Americans to postpone plans and purchases of one kind or another. More than a third (36%) of people say they are postponing daily purchases like meals out, new clothes and event tickets. Three in ten say they are shelving large purchases or projects such as remodeling their home or buying a new car. For younger adults, the postponements also include putting some big life decisions on pause.