Even though middle-income American households remained optimistic in 2023, two-thirds revealed they expect the United States to enter a recession in 2024, according to a Santander US report.
The survey of Americans with a household income range of $47,000 to $142,000 found that growing concerns about a recession has caused 57% of them to delay a major financial decision.
Inflation was the reason most cited by respondents for believing a recession is looming this year as well as the top obstacle to their own financial prosperity.
Nearly half (51%) identified inflation as the primary challenge to their financial well-being in December 2023, which was down from its peak of 57% in the second quarter.
Although 62% of consumers have set financial goals, only one-third are highly confident that they will be able to achieve these goals due to inflation and additional financial challenges in 2024.
Of the 36% of respondents who have student loan debt, 67% said the resumption of federal student loan payments in 2023 is having an impact on their ability to achieve financial prosperity.
An additional 56% of households said they will also be impacted financially by higher health care premiums.
Tim Wennes, CEO of Santander US, said: “While there are positive signals across the US economy, American households continue to face financial challenges in their day-to-day lives that are contributing to their recession expectations.”
Despite acknowledging the headwinds they will encounter in 2024, the survey revealed American consumers were feeling optimistic in the fourth quarter of 2023.
The study found that 70% of respondents believe they are on the right track towards achieving financial prosperity and 80% believe they will achieve this in the next 10 years.
Less than a quarter (24%) described themselves as “financially insecure”, which was a decrease of four percentage points from the first quarter.
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