Many Americans are preparing for an economic downturn even as experts disagree on whether the U.S. is about to enter one.
According to a survey by Allianz Life Insurance Company of North America, 66 percent of Americans are concerned that a significant recession is just around the corner, up from 48 percent who thought the same a year ago.
People’s anxiety over high inflation, which has caused prices for goods and services to rise, is a significant contributing factor.
According to the survey, 82% of respondents are concerned that inflation will reduce their ability to buy goods and services during the next six months. Additionally, a similar percentage of respondents stated that they anticipate inflation will worsen during the upcoming 12 months.
However, 71 percent of respondents claimed that their incomes are not keeping up with rising costs.
(The online study, which Allianz Life did in June, surveyed slightly over 1000 people.)
The U.S. Department of Commerce’s data from last week only served to fuel concerns about a downturn as the gross domestic product fell for a second consecutive quarter, a classic marker of a recession.
The White House, led by President Joe Biden, swiftly refuted claims that a recession had already begun, pointing to, among other things, the record-low unemployment rate.

According to government figures released last week, rising inflation caused consumer expenditure to surge by 1.1 percent in June.
However, as recession fears grow, this may already be forcing Americans to alter their money management practises.
What would lead to a recession being consumer-led?
According to Jonathan Pingle, chief U.S. economist at UBS, consumer spending has been essentially steady over the past seven months notwithstanding the most recent figures.
Households were in good health at the beginning of the year, with surplus savings and strong job market improvements. But then came the addition of high gas prices and rising interest rates.
“Altogether, it’s just proven to be a much weaker trajectory for consumer spending than I think most people expected,” Pingle said. “Where we sit now is kind of in a tenuous spot for the economy.”
Whether or whether the nation is currently experiencing a recession is the hot topic of discussion among analysts.
In the next 12 months, a recession has a 40% chance of occurring according to UBS’ probability model. According to Pingle, the payback from a good fourth quarter in 2021 was some “really noisy” components in the first quarter’s GDP deceleration, leaving the cause of quarter-to-quarter declines still unclear.
A recent UBS research paper suggests that one way a U.S. downturn can manifest itself is as a consumer-led recession. The Federal Reserve may be causing another scenario by overtightening.
According to Pingle, a decrease in consumer spending could be a confidence shock. That may be brought on by households raising their precautionary savings as they put off making purchases out of concern for the future.
To be sure, the advice typically provided to those who want to lessen the impact of a financial slump on their finances is to increase savings and reduce consumption.
“Pay down your debt, boost your savings and keep making those retirement savings contributions throughout the ups and downs,” Greg McBride, senior vice president and top financial analyst at Bankrate.com, made the statement.
“Long-term, when you look back you’ll be really glad you invested in 2022,” he said.
Generational differences in recession worries
However, according to a recent survey by Allianz Life, 65% of investors say they are now keeping more money out of the market than they should because they are afraid of suffering losses.
Baby boomers’ top worry is that they won’t be able to afford the lifestyle they want in retirement due to rising costs, as stated by 73% of them. This was an increase from the 66 percent who mentioned it in the first quarter.
“Having this kind of a downturn coupled with this type of inflation for somebody who is newly retired can really drain your assets significantly faster than you had ever expected,” said Kelly LaVigne, Allianz Life’s vice president of consumer insights.
Seventy-five percent of respondents—an increase from 68 percent in the first quarter—cited that Gen Xers’ main concern is that their income is not keeping up with rising prices.
In the meantime, fewer millennials are prepared financially to deal with growing inflation. According to the poll, 56 percent of people currently have a plan like this, down from 61 percent in the first quarter.
Making a financial plan can assist all people reduce the impact of economic uncertainty, according to LaVigne.
“Regardless of whether you think you have enough money or not, there’s a right financial advisor out there for you,” LaVigne said. “And it’s never too early and it’s certainly never too late.
“Not having a plan is the worst thing you can do,” he added.