Americans are more hopeful about their financial situations these days than they have been since 2020 and expect to be even better off a year from now, according to a new survey.
“The percentage of respondents expecting to be financially the same or better off 12 months from now is 76.5%, its highest level since September 2021,” according to the January Survey of Consumer Expectations, released this week by the Federal Reserve Bank of New York’s Center for Microeconomic Data.
That's a vast improvement compared to February 2020, when that number was 42.9%. In April 2020, it was a staggering 26.6%.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The survey of a rotating panel of approximately 1,300 household heads looked at inflation, labor markets and household finance.
Other findings showed that income growth expectations for households rose to 3.1% last month, remaining above the 2.7% recorded in February 2020 before the pandemic. It also found that more people believe that access to credit is easier now than it was a year ago and their expectation of future access to credit also improved.
The report supports a December 2023 study finding that household wealth increased during the pandemic. However, a large disparity in that wealth still exists between the nation’s richest and poorest people, the December study showed.
Inflation continues to rise
The Fed's January survey also showed that people are uncertain about inflation going forward.
A recent Kiplinger report shows that higher prices for housing and transportation contributed to hotter-than-expected inflation in January. On an annual basis, headline inflation rose 3.1% versus the expected 2.9%, according to the report. Housing contributed a great deal, rising to 0.6% in January from 0.4% in December.
How to protect your financial future
As the economy continues to recover from the impact of the COVID-19 pandemic, there are plenty of steps you can take to control spending and grow your savings. They include creating an emergency fund, negotiating payments with your credit card companies if you have debt and reassessing your budget to identify necessities.
RELATED CONTENT
-
Kiplinger Special Report: Business Costs for 2026Economic Forecasts Fresh forecasts for 2026, to help you plan ahead and prepare a budget on a range of business costs, from Kiplinger's Letters team.
-
I’m 57, with $1.8 million saved, and want a low-stress job for the next decade. My wife says keep cranking and retire at 62 instead. Who’s right?We asked expert wealth planners for advice.
-
My First $1 Million: Retired Army and Health Care Worker, 52, HoustonEver wonder how someone who's made a million dollars or more did it? Kiplinger's My First $1 Million series uncovers the answers.
-
7 Things You Should Do Now if You Think Your Identity Was StolenIf you suspect your identity was stolen, there are several steps you can take to protect yourself, but make sure you take action fast.
-
How AI and Human Expertise Are Changing Wealth Management ServicesWealth management software helps you keep track of your investments and manage your money. We look at Range's all-in-one platform to see how it works.
-
YouTube AI Age Verification: Safety and Privacy Risks UnpackedThe promise of safer screens meets the reality of sensitive data.
-
Lawsuit Claims Zelle Security Lapses Cost Over $1 Billion in Fraud: What You Need to KnowNew York's attorney general is suing Zelle for allegedly allowing "fraudsters to run rampant."
-
$177 Million AT&T Settlement Announced — Are You Eligible for a Payout?Millions of current and former AT&T customers may be eligible for payments after two 2024 data breaches exposed personal information.
-
Walmart to Pay $5.6 Million for Overcharging ShoppersThe retail giant's latest settlement highlights ongoing pricing accuracy issues and what consumers should know before their next shopping trip.
-
Ford Bets on a "Model T Moment" with $30K Electric PickupA sleek new Universal EV platform promises affordable, efficient electric pickups. Ford’s bet on streamlined manufacturing to deliver both value and profit.
