By Nathalie Voit
Prices have gotten so high that most Americans (81%) believe the country is heading into a recession this year, a new survey released on April 5 from CNBC and Momentive found.
Republicans were more likely to expect a recession (91%) than Democrats (73%) or independents (81%), according to the survey. Additionally, those who reported feeling more financial stress over the year were more likely to believe a recession would occur (88% vs. 73%).
Recession concerns were tied to public perception over President Joe Biden’s handling of the economy, with 6 in 10 adults (61%) saying they disapproved of how the administration was handling inflation. Republicans (93%) were more likely to express disapproval than independents (71%) or Democrats (28%).
Despite a post-pandemic economic recovery, more than half of adults (52%) reported feeling more financially stressed out now than during the same time last year as rising prices have many cutting costs to make ends meet.
According to the survey, Americans were most worried about gas prices (21%), followed by housing costs (16%), food costs (13%), and health care/medical costs (10%).
Respondents were more likely to cut back on dining out (56%) to save money than on any other activity. Driving less (39%), canceling a monthly subscription (35%), or switching from a brand-name product to a generic product (32%) were also top of the list.
Should inflation persist, most said they would consider dining out (52%) or driving (42%) less. Four in ten (40%) said they would postpone or cancel their vacation plans.
Almost half of adults (48%) reported constantly thinking about rising prices. Just 6% said they “rarely” or “never” thought of inflation.
The bleak survey results point to looming fears about a recession. On April 5, Deutsche Bank economists warned that the central bank’s aggressive monetary policies needed to bring inflation down to the Fed’s 2% target rate will spark a recession in late 2023.
“We no longer see the Fed achieving a soft landing. Instead, we anticipate that a more aggressive tightening of monetary policy will push the economy into a recession,” Deutsche Bank economists said in a report on Tuesday.
“It is now clear that price stability…is likely to only be achieved through a restrictive monetary policy stance that meaningfully dents demand,” the economists added.