American consumers have reported recession concerns since 2020, and findings show those worries aren’t passing anytime soon.
The 2023 Q2 Quarterly Market Perceptions study by Allianz Life surveyed just over 1,000 American consumers, and found the majority (64%) worry that a major recession is right around the corner, up from 57% in Q1 2023 and 62% in Q4 2022. Baby Boomers reported the most concerns with 67%, compared to 61% of Gen Xers and 63% of Millennials. The rumors aren’t unfounded, as reports predict an impending recession in 2024.
Americans are extending their worries to market volatility, too. Sixty-six percent of Americans say they are keeping more money out of the market and in their pockets because they are anxious over a potential loss.
“Even in this volatile market, it doesn’t make sense to leave too much cash on the sidelines,” said Kelly LaVigne, vice president of consumer insights at Allianz Life, in a statement. “You want to have an emergency fund but you are likely losing purchasing power by not putting your savings to work for you. For long-term goals like retirement, it is critical to take part in the market to try to alleviate the effects of inflation.”
Impacts of rising interest rates
Even as the Federal Reserve reports a cooling inflation, three in five Americans say interest rates have hurt their finances in the past year, with 61% having taken a financial hit due to the rising rates.
Others say they’ve benefited from increasing rates—38% say it helped them financially in the past 12 months.
“Rising interest rates can sometimes feel like a double-edged sword,” added LaVigne. “While savings accounts are earning more interest, it is also more expensive to borrow money for big purchases like a home and many Americans worry that rising interest rates are a harbinger of a recession.”
Protection from market loss
As more Americans are worried about the market, Allianz Life reports a higher number of consumers want products that can mitigate market risk. Sixty-nine percent of respondents say it is important to have some of their retirement savings in a financial product that protects it from market loss, up from 60% in 2022. Most Americans (62%) say they would stop using their current financial professional if they didn’t help reduce exposure to market volatility.
SEE ALSO:
- Expect a Mild Global Recession in 2024
- Participant Financial Stress Hits Highest Level Since Great Recession
- Workers and Retirees Report First Dip in Retirement Confidence Since 2008 Recession: EBRI
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.