Story Highlights
- 61% say recent price increases have caused financial hardship, up from 55%
- 15% say hardship is severe; 46% say moderate
- More mention inflation as most important financial problem than any other
WASHINGTON, D.C. -- Three in five Americans, 61%, say recent price increases have caused financial hardship for their household, marking a six-percentage-point increase from the last reading in November 2022 and the highest since 2021 when Gallup first tracked this measure.
A relatively steady 15% of U.S. adults say the hardship created by inflation is “severe” and affects their ability to maintain their current standard of living, while 46% say it is “moderate” but does not jeopardize their standard of living.
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In November 2021, 45% of U.S. adults indicated they were experiencing financial hardship due to rising prices, and two months later, at the beginning of 2022, hardship was up slightly to 49%. The U.S. inflation rate increased in the following months and eventually hit a 40-year high of 9.1% in June 2022. The share of Americans saying inflation was a source of hardship in their lives subsequently grew to 56% in August and remained steady in November.
The current high in U.S. adults’ views of rising prices as a moderate or severe hardship, from an April 3-17 nationally representative web survey using Gallup's probability-based panel, comes even as the inflation rate hit its lowest point in about two years. This may suggest that the cumulative effects of high prices over the past two years have taken a toll on consumers.
The 15% of Americans who rate the hardship as severe is statistically similar to the prior two readings and has not varied greatly since the first reading.
As has been the case for the past two years, lower-income Americans report greater hardship from inflation than those in higher income brackets. Three-quarters of U.S. adults with an annual household income under $40,000 currently say rising prices are causing them at least moderate hardship, including 29% who say it is severe. Meanwhile, 65% of middle-income adults consider inflation to be a hardship, with 15% saying it is severe. At the same time, less than half of upper-income adults, 45%, say price increases have created hardship for them.
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Inflation Far Outpaces Americans’ Other Personal Financial Problems
A separate Gallup poll, conducted by telephone April 3-25, finds inflation is by far the top trouble mentioned when Americans are asked to name the most important financial problem facing their family. The cost of owning or renting a home (11%) ranks a distant second to inflation, while having too much debt (9%) and a lack of money or low wages (7%) follow close behind. Energy costs, which was second to inflation last year amid high gas prices, has dropped to 5% as gas prices have fallen.
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The latest 35% of U.S. adults naming inflation as their family’s top financial problem supplants last year’s 32% as the highest on record in Gallup’s 19-year trend. The previous high for mentions of inflation was 18% in 2008.
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Inflation is the top financial problem named among all demographic groups.
Bottom Line
Even as inflation has been cooling, the effect of continued high prices has broadened the financial pain Americans are feeling. A record-high 61% of Americans say rising prices are causing hardship for their household, and inflation remains their top financial problem, with more than three times as many mentions as any other problem. The increases in these readings suggest that the recent slowing of inflation has so far done little to provide relief for Americans, and it may take more dramatic changes in prices for the harmful effects of inflation to subside. The public lacks confidence in economic leaders to tackle the problem.
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FAQs
Fifty-six percent of U.S. adults in August 2022 say recent price increases have caused financial hardship for their household. This is up from 49% in January and 45% in November 2021. Twelve percent say price increases have caused severe financial hardship, similar to 9% in January and 10% in November.
Why are so many Americans struggling financially? ›
The US Bureau of Labor Statistics indicated that the shock to food and energy prices, supply chain issues, and an increased demand for products all contributed to the sharp rise in inflation. Fast forward four years and most Americans are still struggling.
Is the US struggling with inflation? ›
Another 37% of Americans say inflation is not a hardship at all. The current 63% saying rising prices are a personal hardship reflects a continuation of peak concern on this measure since Gallup started monitoring it in November 2021. In that initial reading, 45% reported a severe or moderate hardship.
What are some hardships caused by inflation? ›
The most obvious impact of inflation is the loss of purchasing power. As purchasing power erodes, many feel the impacts on their budget. But those on a low income or fixed income often feel the effect the most. As inflation takes hold, it's important to monitor how well your income keeps pace with the changes.
Are people struggling because of the inflation? ›
For some Americans, it's the Great Recession all over again
But the increase from 2019 indicates that more households are struggling to stay afloat after two years of elevated inflation and rising interest rates.
Are Americans struggling financially? ›
Only 48% of Americans have enough emergency savings to cover at least three months' worth of expenses, as of May 2023. 22% have no emergency savings at all. Americans' debt is piling up. 36% of U.S. adults have more credit card debt than emergency savings, as of January 2023, the highest percentage since 2011.
Are people struggling financially in 2024? ›
Feelings of financial insecurity among Americans have reached their highest point in at least a decade. A third of American adults in Northwestern Mutual's 2024 Planning & Progress survey said they don't feel financially secure. That's up from 27% in 2023 and the highest measure going back to 2012.
Are Americans struggling in 2024? ›
Are people struggling financially? Many low- and middle-income households are dipping into savings to pay monthly expenses, Daco says, a development that doesn't bode well for their spending. Credit card debt is already at a record high and delinquencies are at the highest level since 2011.
What percent of Americans are financially free? ›
SAN MATEO, Calif., Aug. 22, 2023 /PRNewswire/ -- Despite most Americans having modest expectations of what it means to attain financial freedom, just 1-in-10 (11%) report they are living their definition of financial freedom, according to a new survey by Achieve, the leader in digital personal finance.
What country has the best economy? ›
The United States is the undisputed heavyweight when it comes to the economies of the world. America's gross domestic product in 2022 was more than 40% greater than that of China, the world No. 2. Even more striking, U.S. GDP was over five times that of the next two largest economies, Japan and Germany.
Percentage of Americans who have mentioned the high cost of living or inflation as the most important financial problem facing their family since 2005. The latest 35% reading is the highest on record and a slight uptick from last year's 32%. Inflation is the top financial problem named among all demographic groups.
How are Americans paying their bills? ›
The Pew survey finds that nearly three-in-ten adults (28%) say the most common way they take care of their regular monthly bills is by an online or electronic payment. A bare majority (54%) mostly uses checks, and a small minority (15%) mostly uses cash.
How to fix inflation? ›
Monetary policy primarily involves changing interest rates to control inflation. Governments through fiscal policy, however, can assist in fighting inflation. Governments can reduce spending and increase taxes as a way to help reduce inflation.
What is causing inflation right now? ›
As the labor market tightened during 2021 and 2022, core inflation rose as the ratio of job vacancies to unemployment increased. This ratio is used to measure wage pressures that then pass through to the prices for goods and services.
Why is inflation a problem in the USA? ›
In an inflationary environment, unevenly rising prices inevitably reduce the purchasing power of some consumers, and this erosion of real income is the single biggest cost of inflation. Inflation can also distort purchasing power over time for recipients and payers of fixed interest rates.
How is inflation affecting US citizens? ›
Price increases cause financial hardship for household by income. Seventy-seven percent of lower-income Americans in November 2022 say higher prices have caused financial hardship for their families, as do 60% of those in middle-income household and 42% of those in lower-income households.
Why is the US suffering from inflation? ›
As the labor market tightened during 2021 and 2022, core inflation rose as the ratio of job vacancies to unemployment increased. This ratio is used to measure wage pressures that then pass through to the prices for goods and services.
Who is most affected by inflation in the US? ›
The figure shows that when inflation is driven by the Fed unexpectedly cutting interest rates, young and middle-aged college-educated households lose the most, while older and less-educated households are largely unaffected or even benefit.
What is the main cause of inflation in the US right now? ›
Rising commodity prices and supply chain disruptions were the principal triggers of the recent burst of inflation. But, as these factors have faded, tight labor markets and wage pressures are becoming the main drivers of the lower, but still elevated, rate of price increase.
