A growing number of U.S. families are citing the cost of living and rising prices as their biggest financial headache — a problem that’s only continuing to grow as inflation sticks around for longer.
That’s according to Gallup’s annual poll on how Americans feel about their personal finances and the economy, which finds that 41% of families surveyed name the high cost of living (or inflation) as the most important financial problem that they’re facing. With the poll released this week, that number is up from 35% a year ago and 32% in 2022.
Concerns over inflation have reached new heights in the two decades since Gallup began carrying out the survey. The post-pandemic economy appears to have kicked families’ concerns over cost of living into high gear. Before 2022, the highest percentage mentioning inflation was 18% in 2008, at the height of the financial crisis.
In June 2022, inflation reached a peak of 8.5% — its highest rate since 1982. That year the average rate of inflation, as measured by the Consumer Price Index, was 8%. Since then, it’s been on a downward trend, averaging 4.1% in 2023.
Despite a string of solid inflation readings that showed the metric falling, inflation began creeping back up earlier this year, and pushed up to 3.5% in March.
Weaker-than-expected inflation readings have put plans for imminent interest rate cuts largely on ice as the U.S. Federal Reserve awaits more positive signs that inflation is inching down to its 2% target.
The news has also caused consumer confidence to retreat: The Conference Board’s Consumer Confidence Index, a metric put out monthly by the business think tank, fell for its third consecutive month in April to 97 — its lowest level since July 2022. Write-in responses to the sentiment survey also cited “elevated price levels, especially for food and gas” as consumers’ top concerns.
The top 10 financial problems for U.S. families
While inflation topped Gallup’s list, a number of other financial woes are also plaguing U.S. families. Home ownership was the second largest issue cited in the survey, coming in at 14% — a new high.
It’s no surprise, given that persistently high home prices, a low supply of available housing, and climbing mortgage rates have all made the housing market extremely inhospitable to prospective homebuyers in recent years.
Debt, healthcare costs, and low wages rounded out the top five financial concerns that U.S. families are grappling with.