Survey: Americans are delaying milestones because of the economy

First with the coronavirus pandemic and now with decades of high inflation, for two and a half years Americans have been unable to catch a break when it comes to the American economy — and the majority are putting off life events because of it.

More than half (or 53 percent) of adults have delayed a major financial achievement because of the state of the economy, while another 58 percent have avoided activities or events, according to a new Bankrate survey. It comes as another 57% say their quality of life has been negatively affected by the economy.

Inflation on daily necessities, including food and gas, is affecting Americans’ purchasing power, and it has taken a toll on their earnings. struggled to keep up.

Nor are these price pressures the only factor limiting consumers’ purchasing power. Rapid interest rate increases by the Federal Reserve have caused financing costs on big-ticket purchases to rise at an unprecedented speed. It has led to a rapid crisis of affordability, especially on homes and cars. It also hurt the wealth of many Americans amid the rapid decline in stock, bond and home prices.

Whether it is inflation, rising interest rates, recession fears, market volatility, or something similar, concerns about the economy are running high. The prevailing sentiment is that the state of the economy has had a negative impact on Americans’ quality of life over the past year.

– Greg McBrideCFA, Chief Financial Analyst at Bankrate

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• More than half of adults (or 53 percent) have delayed a major financial achievement because of the economy, most commonly home improvements or renovations (25 percent), buying or leasing a car (21 percent) or buying a home (15 percent).
• nearly 3 in 5 (or 58 percent) have chosen not to participate in activities or events because of the economy, and are most likely to take time off (37 percent); eating out with friends or family (28 percent); going to an amusement park, zoo, aquarium, or other attraction; or attending live arts events such as concerts and plays (21 percent).
• More than half (or 57 percent) say their quality of life has been negatively affected by the state of the economy, including 22 percent who say they have been affected very negatively.
• Americans whose quality of life was negatively affected are more likely to delay major financial accomplishments (62 percent) or activities (67 percent) than those who were positively or not affected (43 percent and 46 percent, respectively).

More than half of all adults have delayed a major financial achievement because of the economy

The major financial milestones that Americans commonly say they are being held back by the economy are undoubtedly related to that massive increase in interest rates. These include:

• home improvements or renovations (25 percent);
• buying or leasing a car (21 percent); And
• Buying a home (15 percent).

However, others say that the economy affects even personal decisions, such as:

• Marriage (7 percent) f
• Having children (7 percent).

Another 10 percent said they decided to delay continuing their education, while 7 percent paid to pursue career advancement. And while the S&P 500 is down nearly 18% year-to-date, another 9% said they’ve postponed retirement.

Millennials (64 percent; ages 26-41) are especially likely to have delayed a major financial achievement because of the economy, with 26 percent saying they’ve put off buying a home. That compares to the 55 percent of Gen Z (those ages 18 to 25) who say they delayed at least one milestone, along with the 54 percent of Gen X (those ages 42 to 57) and 46 percent of baby boomers. Newborns (ages 58 to 76).

Meanwhile, younger generations (Generation Z and Millennials, at 14 and 12 percent, respectively) are twice as likely as their older counterparts (5 percent) and baby boomers (1 percent) to say they delayed trying to get ahead. in their professional lives.

Americans earning $100,000 or more per year were more likely (58 percent) to delay one or more financial milestones than households earning between $50,000 and $99,999 (55 percent) and others earning less than $50,000 annually (54 percent). ).

Just under half (or 47 percent) of Americans say the economy has not caused them to delay a major financial achievement because of the economy.

Almost 3 in 5 chose not to participate in activities or events because of the economy

The US economy does not prevent Americans from making important financial decisions that will enhance their wealth building opportunities. Consumers are also avoiding socially rewarding activities or events, many of which have lived without during the coronavirus pandemic.

These include:

• taking an overnight stay for leisure (37%);
• eating with friends or family (28 percent);
• going to an amusement park, zoo, aquarium, or other attraction (22 percent);
• attending live arts events, such as concerts or plays (21 percent);
• going to see a movie in the theater (21 percent); And
• Going to a professional sporting event (17 percent).

Even as the economy pushes consumers to delay vacations, travel out of the pandemic is still booming. TSA check-ins between Aug. 31 and Sept. 6, for example, have even surpassed pre-pandemic levels as of 2019, according to Transportation Security Administration. This massive demand has helped push fares on airlines up nearly 43 percent from a year ago, according to the Labor Department.

“Revenge travel spending has been particularly strong, with full flights and sold-out hotels,” McBride says. “But how much stronger can it be? This tends to be the first discretionary expense cut out when families worry about the economic path ahead.”

Gen Z and Millennials were (by 64 percent and 66 percent, respectively) more likely than their older Baby Boomer counterparts (59 percent and 50 percent, respectively) to choose at least one activity or event in the past year.

And while higher-income Americans were more likely to fall behind on major financial accomplishments, the opposite was true with activities. Families making less than $50,000 per year were the most likely to decline an activity (at 61 percent), compared to 58 percent of those earning between $50,000 and $99,999 annually and 55 percent of those earning $100,000 or more.

More than half of them say their quality of life has been negatively affected by the state of the economy

Considering the majority of Americans who say the state of the economy has negatively affected their quality of life, more than 1 in 3 (or 34 percent) say they have been negatively affected to some degree, while more than 1 in 5 (or 22 percent) ) say they’ve been affected most negatively, according to the Bankrate survey.

Only 1 in 8 (or 12%) say the economy has had a positive impact on their lives, including 5% who indicated a very positive impact and 7% who indicated a somewhat positive impact.

Nearly a third (or 31 percent) say the economy has not positively or negatively affected their well-being.

Americans who were negatively affected were more likely to delay activities (at 67 percent) or milestones (at 62 percent) than those who were positively or neutrally affected (at 46 percent for activities and 43 percent for milestones).

Nearly half of those affected by Americans negatively postponed vacation (49 percent), more than twice as much as those affected positively or neutrally (21 percent). Those who were negatively affected were twice as likely to delay buying or renting a car (27 percent) and making home improvements (33 percent) than those who were positively or neutrally affected (14 percent and 15 percent for both accomplishments involved).

Economics was more likely to have a negative impact on women’s quality of life than men (60 percent and 53 percent, respectively). Meanwhile, middle-income families with incomes between $50,000 and $99,999 per year (62 percent) were the most likely to say they had been negatively affected. That compares to 55 percent for both those earning less than $50,000 per year and individuals earning $100,000 and more per year.

Low-wage jobs have seen some of the biggest pay bumps after the pandemic-induced recession as employers run through labor shortages in key retail and food service sectors. Meanwhile, wealthier households with assets like homes and stocks have prospered during the pandemic amid the Federal Reserve’s massive effort to shore up the financial system.

Wealth remains above pre-pandemic levels even though share prices have fallen this year, according to the Federal Reserve Monetary Policy Report for June 2022.

However, a large majority say they have taken a hit – no doubt to do with the rapid increase in prices affecting the daily necessities that consumers need most, from food and gasoline to electricity and shelter.

“The prevalence of price increases continues to be an issue,” McBride says. “Any meaningful easing of household budgets is still somewhere on the horizon. Inflation has been hotter for much longer than expected, and we still have to piece together any kind of winning streak.”

methodology

Bankrate.com commissioned the survey by YouGov Plc. All figures, unless otherwise noted, are from YouGov Plc. The total sample size was 2442 adults. Fieldwork was conducted October 19-21, 2022. The survey was conducted online and meets strict quality standards. It used a non-likelihood-based sampling using quotas upfront during collection and then a back-end weighting scheme designed and proven to provide nationally representative results.