Americans are apprehensive about the future of five key financial aspects of the economy in the next half year. They anticipate higher inflation, unemployment, interest rates, decreased economic growth, and stock market values.
Rise in Inflation Expected by Smaller Majority Than in 2022
Gallup has typically uncovered public perception expecting an increase in inflation, yet the 79% in 2021 marked a record high. In January of that year, U.S. inflation began to climb to levels unseen for more than four decades, and 55% of American citizens divulged their struggles with this surge by late 2022. Fortunately, after reaching its peak in June of last year, the rate is gradually declining again now.
A majority of U.S. adults, comprised of 67%, believe inflation will increase in the upcoming months – a figure that is 12 percentage points lower than in 2022 yet similar to readings from 2004 and 2005, where coincidentally high inflation never occurred. Contrarily, only 20% think it will decrease, while another 12% assert it won’t fluctuate.
Record-High Percentage Predict Stock Market Decline
After Americans recently experienced the worst year for U.S. stocks since The Great Recession, nearly half of all adults assume that stock market performance in 2023 will be even poorer. 48% predict that the market’s value will diminish during the first 6 months of 2023, 18% conjecture no change from current rates, and 31% speculate further growth is on its way – a promising outlook for those who are actively investing and monitoring their portfolios!
Americans‘ pessimism regarding the stock market during 2008’s Great Recession and financial crisis could have been at an all-time high. Although Gallup didn’t ask this question, they found that in April of 2008 – when stocks had lost more value than ever before – 62% of people believed it was not a good time to invest in the stock market, nearly breaking records for negativity.
Broad Majority Continue to Say Interest Rates Will Rise
Since 2001, Americans have regularly predicted that interest rates would rise each year. In light of current high inflation levels, the Federal Reserve raised interest seven times in 2022 – and a whopping 74% of citizens assume they will climb even more over the next six months (the poll was conducted prior to February’s rate increase). Surprisingly, however, equal percentages think interest rates will either decrease (12%) or stay put (13%).
Over the last year, Americans’ outlook on declining employment rates has risen seven points to 41%. Despite having a relatively steady and low unemployment rate throughout 2022, many anticipate that this number will rise during the first half of 2023.
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