- Americans are feeling less financially secure now compared to the end of last year, according to a recent poll.
- They are adjusting their spending habits to adapt to changes in the US economic environment.
Americans are feeling less financially secure now compared to the end of last year, according to a recent poll.
The sense of financial security in the US continues on a downward trend, with the share of those rating their financial security as 'good' or 'excellent' falling 5% since late 2022, and 7% from the end of 2021, according to a new Country Financial Security Index report that surveyed over a thousand adults in the US over three days in early May.
The Federal Reserve's aggressive interest-rate hikes and economic turbulence - including the banking turmoil and fears of a possible recession - have also caused people to adjust their spending habits.
Half of Americans are taking steps to cut back on their monthly bills and are dining out less often to save money, per the survey. And now, 70% have said they are most likely to keep cash on hand given the current economic climate.
Others are cutting back their spending on clothes, driving less to save on gas, switching to cheaper service provider plans and canceling their streaming subscriptions altogether – all to save money.
The US central bank has boosted benchmark rates from near-zero last March to upward of 5% today in an effort to contain inflation that hit 40-year highs in 2022.
Higher rates help to curb the pace of price increases by making borrowing more expensive, and encouraging saving over spending. However, they can also sap demand in the economy, and drag down the prices of stocks, houses, and other assets. As a result, they can contribute to higher unemployment and an economic downturn.