After the last few years of the pandemic, high inflation, high interest rates, and uncertainty in the world economy, there is some encouraging news: The US economy may improve in 2024. According to the Axios Vibes survey of The Harris Poll published on Jan. 17, 2024, many Americans are happy with their personal finances.
This is a good sign that the dreaded “vibecession” is over. For those unfamiliar, vibecession refers to poor economic conditions due to high prices and high interest rates. If people feel secure in their jobs, happy with their personal finances, and willing to continue spending and investing, the entire US economy can continue to grow in 2024 and beyond.
Let’s take a look at some of the key findings of the Axios Vibes survey and what it could mean for the economy and your personal finances.
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1. Most Americans feel “good” about their money
The Axios Vibes survey found that 63% of all Americans say their current financial situation is “good,” and 19% said their finances were “very good.” With low unemployment and possible interest rate cuts in 2024, this could be a sign that many Americans are feeling positive about their earning power and borrowing costs.
However, not all Americans are equally happy with their personal finances. The survey found that 37% of Americans say their personal financial situation is “poor.” These groups of Americans are more likely than the national average to say their finances are “poor:”
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- 42% of Republicans
- 43% of women
- 46% of rural residents
- 47% of singles
- 57% of people rent their homes
Only 32% of people in relationships, and 28% of Democrats, say their personal financial situation is “poor.”
What can explain these differences of opinion? Women face the gender pay gap, where they are paid an average of $0.82 for every dollar men earn. Singles have to pay the rising cost of housing and groceries on their own, with no partner to share the cost. Renters see their housing costs increase, but don’t get equity from rising home prices like homeowners.
The analysis of the Axios Vibes survey also found that Republicans and rural residents with higher levels of financial dissatisfaction with the national economy “may reflect a general lack of trust in institutions or national leaders .” When your political party controls the White House, you may feel that the US economy is on the right track.
2. Most Americans are optimistic about the future in 2024
Looking ahead to the rest of the not-so-“new” year of 2024, many Americans are feeling optimistic about the future of their personal finances. The survey found that 63% of Americans say their job security is “a sure thing,” 66% of Americans think 2024 will be better than 2023, and 85% of Americans believe they can change their personal finances for better in 2024.
This is an encouraging sign. Many people, even as they struggle with higher prices and dwindling savings, have the power to control their finances. Here are some possible ways to change your personal finances for the better in 2024:
Unemployment is at 3.7% in December 2023, which is back to pre-pandemic levels and near a 20-year low. Low unemployment means more people have the “pricing power” to demand better wages. The Fed may cut interest rates in 2024, making it easier to refinance your personal loan or pay off high-interest debt.
3. The US economy still has room to grow in 2024
Not everyone is feeling good about their personal finances, and high inflation for food and gas is a big reason. People are still feeling the pain of high grocery prices – an Axios survey found that:
- 60% of Americans feel “triggered” on trips to the grocery store.
- 67% of Americans think food will continue to be more expensive.
- More than 50% are concerned that gas prices (which have been declining in recent months) will start to rise again.
As Americans drain their savings accounts and rack up more credit card debt, there are signs that some Americans are engaging in what The Harris Poll research describes as “consuming denial. ” This means that people continue to spend, even when they cannot afford it. The rise in credit card delinquencies could be a sign of more pain to come for Americans who don’t have enough emergency cash savings.
Bottom line: Many Americans say they are happy with their personal finances, despite concerns and frustrations about high prices and the overall economy. But nearly 9 out of 10 Americans agree on one important thing: They believe in their ability to make proactive, positive changes in their financial lives. Regardless of what happens to the economy in 2024, you have the potential to make it a great year for your savings and investment goals.
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