The last time Americans were so optimistic about their personal finances, Bill Clinton was early in his second term in the White House.
According to the latest Gallup poll released this week, 69 percent of Americans say they expect to be financially better off “at this time next year.”
That is only two percentage points below the all-time high of 71 percent, recorded in March 1998 at a time when the nation’s economic boom was producing strong economic growth combined with the lowest inflation and unemployment rates in decades.
The poll even caught President Donald Trump’s attention, as he tweeted Wednesday he thought it was “nice” that such a high percentage expect their finances to improve next year.
Only once in 114 such Gallup polls dating back to 1977 have Americans been more optimistic about their personal finances in the coming year than they are today. This in spite of the longest partial government shutdown in American history and a growing sense of pessimism about the nation’s economy. Hey, no pressure, but sounds like 401k plan participants are expecting their balances to see some strong growth in 2019.
Americans are typically less positive about how their finances have changed over the past year than about where they’re headed, and that remains the case with findings in the latest poll. Fifty percent say they are better off today than they were a year ago. That 50 percent still represents a post-recession milestone – the first time since 2007 that at least half of the public has said they are financially better off than a year ago.
Ten years ago, as the Great Recession neared its end, the percentage saying their finances had improved from the previous year was at a record low of 23 percent. More than half the public, 54 percent, said they were worse off. Now, with unemployment below 1998 levels and the job market growing steadily, the number saying they are worse off than a year ago has dropped to 26 percent, the lowest level since October 2000.
Optimism varies by political affiliation
Members of most major demographic groups are more likely in 2019 to say their financial situation has improved in the past year than to say they are worse off – with Democrats the one major exception. By 37 percent to 32 percent, more Democrats say that compared with a year ago, they are worse off financially rather than better off. However, among some of the key groups that generally vote Democratic, a plurality or majority say they are better off.
• 62 percent of those under 30 say they are better off; 25 percent say worse off.
• 45 percent of women say they are better off; 29 percent say worse off.
• 45 percent of those with annual household incomes of less than $40,000 say better off, 35 percent worse off.
• Among liberals, 40 percent say better off, 31 percent worse off.
Republicans are at the other end of the spectrum, with 68 percent saying they are better off, and only 10 percent saying worse off. Among groups that are more Republican than the national average, 66 percent of conservatives say they are better off, as do 57 percent of those with annual incomes of at least $100,000 and 56 percent of men.
Both Republicans and Democrats significantly changed their perceptions of how they were doing financially after the 2016 presidential election put Donald Trump in the White House.
The two most recent times the question was asked before Trump’s election, in Jan. 2015 and Jan. 2016, as many Republicans – 37 percent, on average – said they were worse off as said they were better off. In the two polls since Trump has taken office, one in Jan. 2018 and one in Jan. 2019, a robust majority of 67 percent have said they are better off, compared with 13 percent saying “worse off.”
Democrats, who were more than twice as likely to say they were better off (58 percent) rather than worse off (24 percent) in the two pre-Trump-election polls, have reversed field, with 35 percent saying they are better off and 38 percent saying worse off in the two post-Trump-inauguration polls.
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.