That’s how few people felt “very healthy” financially at the end of the year, down from 48% at the beginning, a new survey showed.
The drop in financial confidence comes despite a record-breaking year for stocks, plenty of jobs, and an economy that’s bounced back from pandemic lows. So why the gloom? One big reason is inflation, according to a survey of more than 2,000 U.S. adults commissioned on behalf of Empower and Personal Capital. Consumer prices rose 7% in the 12 months through December—most in 40 years—and many people are experiencing high inflation for the first time.
“Inflation has gone from a theoretical concept in the financial media to a daily reality hitting kitchen table discussions,” Craig Birk, Personal Capital’s chief investment officer, said in a statement. “The idea that what your income is or what you already have may not really be worth as much as you thought can be disturbing.”
Indeed, Americans believe a person needs to earn $122,000 per year to feel financially healthy, the survey showed. That’s more than double the median annual salary of $52,156, as reported by the Bureau of Labor Statistics.
Have a question, comment, or story to share? You can reach Medora at firstname.lastname@example.org.