Half of Americans say they are worse off financially than they were a year ago, the highest level of reported decline since the financial crisis, a Gallup poll released Wednesday showed.
The results are unusually grim.
“Since Gallup first asked this question in 1976, it has been rare for half or more of Americans to say they are worse off. The only other times this occurred was during the Great Recession era in 2008 and 2009,” Gallup News said.
The results of the survey, taken between January 2nd and the 22nd, suggest the high toll of inflation on the financial situation of many Americans. Average hourly and weekly wages declined for the second consecutive year in 2022, as pay increases were swamped by higher prices. Gallup said higher interest rates and the decline in the stock market also weighed on people’s view of their financial situation.
The results come as unemployment has fallen to the lowest level since 1969 and job openings have been at or near historical records.
Last year, Americans were evenly divided on whether they were better off or worse off, splitting 41 percent to 41 percent. They were evenly divided the year before that, as well.
Although President Joe Biden has said his policies are designed to “build an economy from the bottom up and the middle out, not from the top down,” lower-income Americans are far more likely to report that they became worse off during the second year of the Biden administration. About 61 percent of households with incomes under $40,000 reported they were worse off, according to the Gallup survey. Just 26 reported they were better off.
This is a big jump from last year, when just 41 percent of lower-income Americans said they were worse off.
Nearly half of middle-income households say they are worse off, around the same as last year. Thirty-seven percent report their household financial situation has improved.
Among higher-income Americans, forty-three percent say they are worse off, up 10 points from last year’s survey. Thirty-nine percent say they are better off.
Partisan politics may be playing a role in how people evaluate their personal finances. Sixty-one percent of Republicans say they are worse off while just 37 percent of Democrats say that. Forty-seven percent of Democrats say they are better off.
Yet many Americans appear to believe the worst is behind them. Sixty percent expect to be better off a year from now, the survey shows. Twenty-eight percent expect to be worse off. That optimism is shared across the income spectrum, Gallup said. Even still, Americans expect economic conditions to deteriorate, with inflation, unemployment, and interest rates expected to rise while economic growth and stock prices are expected to decline.