Last Updated on July 19, 2022
A sizable majority of Americans — 70% — believe that the country is heading towards a recession, according to a survey from MagnifyMoney. The online survey was conducted between June 10 and 14 and included 2,082 respondents.
The official definition of a recession requires a period of economic downturn that lasts for at least two quarters.
Record-high inflation has caused an increasing number of Americans to believe that a recession is inevitable, however. According to the MagnifyMoney survey, a whopping 88% of respondents identified inflation as the biggest indicator of a coming recession.
Beyond inflation, 61% of respondents identified surging housing costs as an indicator. MagnifyMoney also found that 56% point to increased interest rates as to why they believe a recession is inevitable, 55% pointed to the stock market, 42% cited a decline in consumer spending and 36% chose rising unemployment.
The MagnifyMoney survey was conducted not long before the most recent inflation data was released by the U.S. Department of Labor. Year-to-year inflation was most recently measured at 9.1%, its highest point in decades.
When asked what respondents most fear about a potential recession, 44% citied an inability to pay bills.
In order to prepare, 62% said they were cutting back on spending, while 39% have instituted a budget. MagnifyMoney respondents also reported taking steps to shore up their income streams, with 24% saying they have taken up a side job.
The Federal Reserve is expected to soon announce additional interest rate hikes in an effort to tame inflation. The Fed previously green-lit the nation’s largest rate hikes since 1994 after last month’s meeting.
The Biden Administration has largely attempted to pin rising prices on Vladimir Putin, a talking point that Fed Chair Jerome Powell has publicly refuted.
