Two-thirds of American investors say they are concerned about the outlook for the U.S. economy over the next 12 months, according to survey results released Tuesday by State Street Global Advisors. Generation X respondents reported more pessimism than their younger and older counterparts.
Fifty-seven percent of respondents in its Inflation Impact Survey cited worries about market volatility, and 59% about the value of their current investments.
Rising inflation has caused 51% of investors surveyed to curtail discretionary spending such as dining out and entertainment over the past 12 months. Thirty-five percent have spent less on vacations or delayed a major purchase, and 29% have cut back on essential expenses such as groceries and gasoline.
Amid the belt-tightening, it is not surprising that 58% of respondents think the U.S. economy is headed for a recession in the next six to 12 months, and 47% say inflation is causing them stress or anxiety.
Furthermore, few believe the worst is over. Only 17% of investors said inflation has already peaked, in contrast to 49% who said it has not.
"As Americans work to defend themselves against the corrosive effect of inflation on their finances, we're encouraged to see the majority are making tradeoffs in discretionary spending, rather than sacrificing contributions to their long-term savings goals," Brie Williams, head of practice management at State Street Global Advisors, said in a statement.
"Notably, less than one-quarter of Americans were willing to curtail contributions to their retirement savings or their child's education savings, which demonstrates a firm commitment to their long-term financial goals."
SSGA, in partnership with A2Bplanning and its field partner, Prodege, conducted an online survey from June 28 to July 5 among 243 adults with investable assets of $250,000 or more.
Gen Xers in Distress
The survey found that 43% of millennials believe inflation has peaked, compared with a mere 5% of Gen Xers and baby boomers.
