Two years ago, the global shutdown sent the economy reeling, and many Americans, especially lower-income households, experienced a seismic shift in their financial security. Consumers reported worsening personal finances and a feeling that the economy was weakening. Their outlook for 2021 was equally as dim, with fewer Americans feeling optimistic about improvements in personal finances for the coming year. Uncertainty about the pandemic, unemployment, and higher prices threatened to thwart the comeback story of the American consumer. But with the mass distribution of COVID-19 vaccines, better protocols and treatments, and the distribution of trillions of dollars in federal stimulus, consumer sentiment has returned to pre-pandemic levels. In our seventh annual ThinkNow Pulse™ Report, Americans say their income has improved in the past year, and their outlook on personal finances and the U.S. economy is just as strong as it was in 2019 or stronger. Download the report here.
Two-fifths (42%) of Americans report an improvement in household income in 2021, significantly more than a year ago, and the highest proportion seen in the past five years. Across key racial and ethnic segments, significantly more consumers reported an improvement in their income in 2021, highest among Non-Hispanic Whites and African Americans. Consumers reporting household income worsened is highest among minorities.
One factor that impacts household income is employment. The study finds that significantly fewer Americans report job-related losses than a year ago. But Hispanics continue to be the segment most likely to have lost a job or experienced a reduction in work hours. There are several contributing factors to this. One is that minority workers often earn blue-collar wages in fields like construction or manufacturing or work in hospitality, areas vulnerable to economic swings. While the economy is beginning to recover from pandemic losses, ongoing COVID-19 variant concerns, supply chain shortages, and the ensuing economic fallout could continue to be a source of challenges here, including job interruption.
Despite a higher likelihood of losing a job, at 56%, Hispanics are the most optimistic about the state of their household finances of the four major racial and ethnic groups in the U.S.
Compared with previous years, Americans are significantly more optimistic about the U.S. economy in 2022, driven primarily by Non-Hispanic Whites and Asians who report a significant increase in the belief that the economy will improve this year.
To take a deeper dive into the data, download the ThinkNow Pulse™ Report today.