SURVEY: Americans concerned U.S. economy will get worse before it gets better

Consumers looking to cut back on insurance coverage aren't considering financial impact of future losses

COLUMBUS, Ohio, Oct. 4, 2022 /PRNewswire/ -- Increased interest rates, climbing inflationary costs and a higher cost of living are concerning consumers as they fear a looming recession, leaving them feeling unprepared when it comes to their personal finances.

A recent Nationwide Agency Forward survey shows that consumers in the U.S. are feeling vulnerable as they perceive the worsening economy to be negatively impacting their personal finances, mental health and job security.

Roughly 3 in 4 (76%) of consumers rate the current U.S. economy as 'poor' or 'fair.' And when asked about the state of their personal finances, more than half (53%) say their situation is 'poor' or 'fair.'  The survey, fielded Sept. 6 – 13 ahead of the latest Fed interest rate increase, also showed 68% of consumers expected rates to rise in the coming months.  And there is no anticipation that inflation will give in the next six months – 64% believe inflation will increase, including 69% of Gen Z respondents.

Additionally, two-thirds of consumers expect the U.S. economy will be in recession in the next six months, and more than half (55%) expect the U.S. stock market to decline further. Unfortunately, less than 4 in 10 (37%) consumers feel prepared to weather a recession.

The survey also revealed specific economic pressures that are worrying consumers:

• 77% are concerned about inflation and rising living costs, and 71% say the same about a possible recession and economic downturn in the U.S.
• Roughly half believe that their personal financial situation has been negatively impacted by inflation/rising living costs (66%) and the uncertain economic environment (49%) over the past 6 months.
• Even more frightening, more than half (54%) also report that inflation/rising living costs have negatively impacted their mental health – especially for Gen Z consumers (64%).

"Consumers are understandably feeling financially vulnerable due to escalating economic pressures. And they lack a clear understanding of how they can best prepare and brace for continued financial instability," said Ben Ayers, Nationwide's senior economist.

4 in 10 consumers are concerned about losing their job, being furloughed or taking a pay cut. The tightening economy has also led to more than 1 in 4 employees (26%) being asked to take on more responsibilities without additional compensation in the last 6 months. In a time where costs are continuing to increase, the impact of losing a job would have major implications to any household. With uncertain job futures, many consumers are considering where they can begin to cut back to prepare for the worst.

With the unsure outlook ahead, consumers are understandably looking to cut expenses where they can. When it comes to their insurance policies, more than half of consumers (56% Gen Pop, 65% Gen Z) have already looked or will look for ways to save on premiums with their existing policies – unaware that cutting back now may result in greater financial loss in the future. To further mitigate financial losses:

• Roughly a third or more of consumers have dined out less frequently (38% Gen Pop, 41% Gen Z).
• 36% of Gen Pop and 46% of Gen Z have adjusted their budget.
• A third (33% Gen Pop, 32% Gen Z) have reduced the amount they drive.
• Many began to purchase cheaper/different items than they typically would (32% Gen Pop, 41% Gen Z) over the past 6 months.

"Cutting insurance coverage to save money is a short-term fix that can lead to long-term financial issues if something were to happen," added Beth Riczko, President P&C Personal Lines. "Consumers looking for ways to save money should speak with their insurance agent to ensure their policy can best suit their current needs to protect them from any unexpected problems."

Nationwide commissioned Edelman Data & Intelligence to conduct a 15-minute quantitative online survey among a sample of 2,000 nationally representative consumers, 200 Gen Z consumers, 401 small business owners, 408 middle market business owners, and 401 agents between September 6 and September 22, 2022. As a member in good standing with The Insights Association as well as ESOMAR Edelman Data and Intelligence conducts all research in accordance with local, national and international laws as well as in line with all Market Research Standards and Guidelines.

Nationwide, a Fortune 100 company based in Columbus, Ohio, is one of the largest and strongest diversified insurance and financial services organizations in the United States. Nationwide is rated A+ by both A.M. Best and Standard & Poor's. An industry leader in driving customer-focused innovation, Nationwide provides a full range of insurance and financial services products including auto, business, homeowners, farm and life insurance; public and private sector retirement plans, annuities, mutual funds and EFTs; excess & surplus, specialty and surety; and pet, motorcycle and boat insurance. For more information, visit www.nationwide.com. Follow the firm on Facebook and Twitter.

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Contact:
Lyndsey Kleven
614-507-0485
[email protected]

SOURCE Nationwide