A new survey published by Bankrate revealed that Americans are anticipating a financial hit in 2024, as prices for necessities such as food, housing, and healthcare stubbornly remain high. The study’s author found that nearly two-thirds, or about 63%, of consumers expect their personal finances to remain the same or deteriorate. While only 37% of Americans anticipate financial improvement in the coming year.
The primary obstacle to financial improvement identified is still-high inflation. Almost 61% of respondents blame the ongoing spike in prices for the potential hit to their finances next year. In particular, the rising cost of necessities such as gasoline, rent, food, and child care has left many households struggling financially. According to a recent estimate from Moody’s Analytics, Americans are spending about $650 more per month than they were two years ago.
Greg McBride, the Chief Financial Analyst at Bankrate, noted that prices are still notably higher than they were a few years ago, and households feel the impact. Although the rate of inflation may be declining, prices are not decreasing. While inflation has fallen from the highs of mid-2022, many families have yet to see material relief.
The consumer price index is still running well above the typical pre-pandemic rate, and the cost of necessities remains far more expensive than it was just one year ago. Americans are spending roughly 17.62% more on necessities compared to January 2021. Despite the government’s announcement that inflation remains up 3% on an annual basis, this figure does not reflect the current reality.
Furthermore, the survey found that 26% of respondents expect their finances to deteriorate, indicating significant pessimism towards financial prospects in the coming year. Another 38% think their financial situation will stay the same, and the remaining 37% expect to see an improvement.
The survey’s results indicate that despite an optimistic outlook toward the future, the US economy continues to experience challenges. Factors such as high inflation and rising costs of necessities could have long-lasting impacts on Americans’ financial well-being. Therefore, policymakers must take necessary steps to alleviate inflation and provide relief to those experiencing financial hardship.