![]() Treasury Secretary Janet Yellen acknowledges there’s definitely a chance we’ll see a downturn, but she’s also seemingly more optimistic than the average American these days. “There’s a risk of a recession,” Yellen said recently in an interview with CBS 60 Minutes. That could lead to more layoffs and higher unemployment across the board.Įven worse, some financial experts see stagflation-where Americans will be contending with not only high inflation, but also high unemployment and slower economic growth-as a bigger risk. could be heading for a recession-an outcome many experts predict is inevitable at this point. In addition to inflation pressures, if the Fed fails to stick its so-called “soft landing” goal of bringing down inflation without causing a severe economic downturn, the U.S. ![]() “These challenges aren’t going to go away when we flip the calendar, so it is best to make a plan for mitigating ongoing risks.” “This has been a tough year for Americans with inflation creating havoc with their finances,” Kelly LaVigne, vice president of consumer insights at Allianz Life said in a statement. Even though inflation cooled more than expected in November-giving hope to the idea that the Federal Reserve’s rate hikes are having the intended effect-the costs of goods and services last month still rose an average of 7.1% year-over-year. Inflation, of course, is playing a major factor. There are reasons enough for the gloomy outlook. Not exactly the most optimistic viewpoint heading into 2023. adults believe their finances will get “significantly worse” over the next year. ![]() Two in three Americans don’t expect their finances to improve in 2023, according to a recent Bankrate survey. ![]() The new year isn’t exactly looking bright either. Younger and Hispanics Americans, as well as renters saw the most rapid deterioration in their financial health. After several years of increased savings and better financial health thanks to federal pandemic stimulus programs, the average American saw their finances slip back to pre-pandemic levels, according to a recent report from the Consumer Financial Protection Bureau. Yet even while more people practiced good financial habits, many Americans said their financial situation is worse than a year ago. Only about a quarter (26%) of Americans reported overspending in 2022, compared with 28% in 2021 and 32% in 2020, according to the New Year’s Resolutions Study from Allianz Life Insurance Company of North America that surveyed a nationally representative sample of 1,000 respondents. ![]()
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