Despite positive economic indicators like a robust stock market and cooling inflation, financial insecurity is still pervasive in the United States. The high cost of living, wealth inequality and job market uncertainty have all contributed to financial vulnerability, even among wealthy families.
Concerns about personal debt, including credit card, auto loan and medical debt, are significant sources of financial stress. American households are struggling to cope with rising costs of essentials like groceries, housing and healthcare. This squeezes budgets and leaves families feeling anxious about their long-term financial stability. Geopolitical tensions also add to uncertainty about the future.
The Fear Of Falling Behind
U.S. economic recovery is unevenly distributed, with the wealthy benefiting disproportionately from stock market gains and asset appreciation. This widens the wealth gap, leaving middle-class and lower-income families feeling left behind and insecure about their prospects.
Forbes Advisor provided a pulse check on customer sentiment during the first half of 2023. According to the survey findings, 75% of respondents reported they were either “very concerned” or “somewhat concerned” about their family’s financial security. Eighty percent of Americans were distressed about their household’s emergency savings, while 60% were anxious about their level of debt. Seventy-two percent of respondents said they were concerned about their family’s ability to cover expenses after they die.
A separate CNBC survey, in partnership with SurveyMonkey, found that nearly 75% of American working adults are stressed about their personal finances. More than half of the respondents (61%) reported “living paycheck to paycheck.” Seven in 10 U.S. workers stated they would require an annual salary of no more than $150,000 a year to feel financially stable.
In need of emergency cash, Americans are increasingly withdrawing from their retirement savings, according to Bank of America.
Data analysis from BofA showed that 401(k) participants taking hardships distribution surged 36% year-over-year. Additionally, the rate of people borrowing from their workplace plans increased.
The Problems Being Faced And Why White-Collar Workers Are Worried
Despite a low unemployment rate (3.7%) and rampant hiring, the U.S. job market is cooling for white-collar workers. With job scarcity comes financial insecurity. Government data from the Bureau of Labor Statistics reveals that job openings fell by 617,000 to 8.7 million on the last day of October, the lowest level since March 2021.
According to the St. Louis Federal Reserve, hiring fell 18,000 to 5.886 million that same month. There has been a significant decrease in the pace of hiring in the private sector since reaching the highest point in November 2021.
Although the U.S. economy added 199,000 jobs last month, job growth has been heavily concentrated in three main sectors: healthcare, government and leisure and hospitality. Employment gains in these three sectors alone account for nearly 83%—166,000 jobs—of the new jobs created in the U.S., and don’t accurately reflect the overall health of the labor market.
To make matters worse, there were over 260,000 job cuts in the tech sector alone in 2023, according to Layoffs.fyi, with no sign of stopping this holiday season.
Source: Forbes
