A record share of Americans now expect their personal finances to get worse over the next year.
About 41% of US consumers expect to be worse off financially a year from now, the Kobeissi Letter says , citing the University of Michigan’s Surveys of Consumers.
“This figure has more than tripled since Q2 2024.
By comparison, during the 2008 Financial Crisis, this metric peaked at 23%.
This proportion is also significantly higher than in the 1970s and the 1980s, when CPI inflation was above 10%.”
The Kobeissi Letter/X
Looking further out, 31% of consumers expect their finances to be worse in five years, double the proportion witnessed in the 1980s.
The university’s latest report finds that 56% of consumers now say high prices are dragging down their personal finances, up from 45% in January.
Says Joanne Hsu, director of the surveys,
“Purchasing power continues to dominate consumer views of the economy. Sentiment is now 10% below a year ago and 15% below February, just prior to the Iran conflict…
These increases are seen across the political spectrum, with Republicans exhibiting the largest proportional rise. Similarly, consumers with no stock holdings or very small holdings also report increased concerns over the effect of high prices on their personal finances over the course of the year.”
The Consumer Sentiment Index came in at 48.0 in October, down from 48.1 in September and 53.6 a year earlier.
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