Is everyone struggling financially in 2024?
Nearly half of Americans will start 2024 in the red
Consumers moderated on their spending in January, but that was just a blip on a path toward continued increases in expenditures over the course of 2024. The real surprise was continued spending gains in 2023. Most of the reasons for last year's growth will continue over into 2024, but at a slower pace.
Global growth is projected at 3.1 percent in 2024 and 3.2 percent in 2025, with the 2024 forecast 0.2 percentage point higher than that in the October 2023 World Economic Outlook (WEO) on account of greater-than-expected resilience in the United States and several large emerging market and developing economies, as well ...
Although it seems unbelievable, according to a report by LendingClub, as of January 2024, 60% of United States adults, including more than four in 10 high-income consumers, live paycheck to paycheck. This means that over 160 million Americans are struggling to make ends meet each month.
A 2023 survey conducted by Payroll.org highlighted that 78% of Americans live paycheck to paycheck, a 6% increase from the previous year. In other words, more than three-quarters of Americans struggle to save or invest after paying for their monthly expenses.
In calendar year 2023, the U.S. economy grew faster than it did in 2022, even as inflation slowed. Economic growth is projected to slow in 2024 amid increased unemployment and lower inflation. CBO expects the Federal Reserve to respond by reducing interest rates, starting in the middle of the year.
“As a result, the leading index currently does not signal recession ahead. While no longer forecasting a recession in 2024, we do expect real GDP growth to slow to near zero percent over Q2 and Q3.”
The International Monetary Fund (IMF) forecasts a slight decline in global growth to 2.9% in 2024, down from 3% in 2023. However, much of this growth is made up of emerging markets activity, while growth in advanced economies remains tepid.
Our forecasts call for the U.S. economy to grow 1.6% in 2024 and 1.7% in 2025. But if the U.S. labor market merely remains as resilient as it has been since late 2020, U.S. growth could be half a percentage point stronger in 2023 and 0.7 point stronger in 2025.
By March 2025, it is projected that there is a probability of 58.31 percent that the United States will fall into another economic recession.
Do most people live above their means?
According to a recent PYMNTS report, as of November 2022, 76 percent of U.S. adults who make less than $50,000 are living paycheck to paycheck, compared to 65.9 percent of those making $50,000 to $100,000 and 47.1 percent making more than $100,000.
If you are facing financial stress right now, you are not alone. According to a recent Ramsey Solutions study, 34% of survey respondents indicated that they were either facing financial struggles or were actively in crisis.
What Does Living Paycheck To Paycheck Mean? Living paycheck to paycheck means you spend all your income on your monthly living expenses – like your rent or mortgage, utilities, groceries and transportation – and have little to no money left over.
Nearly one in four (22%) of U.S. adults have no emergency savings at all, Bankrate found—the second-lowest percentage in 13 years of polling. That's especially bad news given that most Americans would need at least six months of emergency savings to feel comfortable day-to-day.
The total personal debt in the U.S. is at an all-time high of $14.96 trillion. The average American debt (per U.S. adult) is $58,604 and 77% of American households have at least some type of debt. Let's pause a second to define debt.
At the end of 2022, 73 percent of adults were doing at least okay financially, meaning they reported either “doing okay” financially (39 percent) or “living comfortably” (34 percent).
A panel of economists expect this year to be characterized by faster growth, shrinking inflation and healthy job creation — a far cry from the widespread fears of a recession that marked 2023.
Labor Force Participation in 2024 and Beyond
In the near term, we expect slowing economic growth to cause the unemployment rate to rise to 4.0% on average in 2024 (peaking at 4.3% in the fourth quarter of 2024) from an average of 3.7% in 2023, which is quite mild compared with US economic slowdowns in recent decades.
US recession may have just been delayed to 2025, as per a recent note from JPMorgan's trading desk that highlighted the strength seen in ISM manufacturing activity in March that jumped over 50 for the first time since September 2022 which represents an expansion in manufacturing activity.
“The American economy is not in a silent depression. It's not even in a depression at all,” House said. “When we came into 2023, many economists thought we might slide into a recession over the course of the year, but growth in goods and services and in trade have all remained far stronger than we anticipated.”
Is a depression coming?
ITR Economics is projecting that the next Great Depression will begin in 2030 and last well into 2036. However, we do not expect a simple, completely downward trend throughout those years. There will be signs of slight growth that pop up during this period.
According to the National Bureau of Economic Research (NBER), the average length of recessions since World War II has been approximately 11 months. But the exact length of a recession is difficult to predict. In general, a recession lasts anywhere from six to 18 months.
We expect inflation to average 1.9% from 2024 to 2028—falling just under the Fed's 2.0% inflation target. If inflation proves stickier than expected, the Fed stands ready to do whatever's necessary—including inducing a recession—to bring inflation down to 2%.
The continued destruction of the earth's forest mantle as a result of human activities is another desperate concern. By 2025, some 3 billion people will live in land-short countries and another 2 billion will be living in urban areas with high levels of air pollution.
Most worrying topics worldwide 2024
Inflation was the most worrying topic worldwide as of March 2024, with more than one third of the respondents choosing that option. Poverty and social inequality as well as crime and violence ranked second at 30 percent.
