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Key Takeaways
- The number of Americans who fear a recession decreased from last year to 55%, a new report from Allianz Life showed.
- Economists now forecast a much lower probability of recession and the Federal Reserve is working to temper inflation while keeping unemployment low.
- The report also showed that confidence in the economy has allowed more Americans to invest their money rather than hold it in cash.
As inflation cools and the stock market gains ground, fewer Americans are worried about a recession and their investing, according to a new survey.
The report from Allianz Life showed 55% of Americans fear a recession is imminent, down from 64% last year. In addition, Gen X—people born between the mid-1960s and the early 1980s—is more afraid a major recession is on the way than their baby boomer or millennial counterparts.
Economists predict a much lower probability of a recession than consumers do. As of April, economists surveyed by The Wall Street Journal forecast a 29% chance of a recession, the lowest probability in two years.
The Federal Reserve is walking a fine line, working to temper inflation while trying to avoid tipping the economy into a recession. Despite the number of job openings falling to its lowest since 2021, widespread layoffs (often an indicator of a recession) haven’t been seen.
More Confidence in the Economy Is Boosting Stocks
Now that fewer Americans are worried about a recession, they are putting more of their cash into investing.
The number of Americans who are nervous about investing has gone down to 37% this year from 46% last year, according to the Allianz survey. Many are also putting more money into investing, as the number of people who would rather hold their money in cash has decreased to 56% this year from 63% last year.
As a growing number of people are putting their money to use, more are seeking to meet with their financial advisors.
More than half of Americans wish to meet with a financial professional more frequently, millennials being the most eager at 71%. The majority of those surveyed (85%) already have met with their financial professional in the past year.
“While it’s encouraging that many people are feeling more comfortable with the market, it’s important to remember that setting yourself up for future financial stability is done over the long run,” Kelly LaVigne, vice president of consumer insights at Allianz Life, said in the survey press release.