A new Gallup survey shows more than two-thirds of Americans think they’ll be in better financial shape this time next year — the highest level of optimism in more than 16 years.
But Americans aren’t just optimistic about the future. Half of those surveyed said they’re in better financial shape now than a year ago, a post-recession high.
News that Americans are feeling good about their finances shows that while debate over the overall health of the U.S. economy continues, at an individual level, the Gallup Poll shows that most feel more financially secure than a year ago.
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Why does this matter?
The Gallup survey shows Americans have near-record levels of optimism when thinking about their financial futures. The latest result showed 69% were optimistic about their finances in the year ahead, just two percentage points below the record 71% who expressed optimism in March 1998.
This is noteworthy because Americans haven’t reported feeling this good for a while. In fact, according to Gallup, Americans’ financial optimism reached a low point following the Great Recession. Ten years ago, Americans who said their finances had improved from the previous year hit a record low of 23%.
Today, unemployment is at its lowest level in decades, and the job market is growing. Based on these economic trends, combined with incremental wage growth, many Americans appear to be feeling more secure, prompting a more optimistic outlook.
What’s more, the Gallup survey is just the latest positive news about Americans’ views on the economy. The latest University of Michigan consumer sentiment index from February 2019 shows that Americans are feeling better about economic conditions than they were in January.
What else should you know?
While the Gallup survey and University of Michigan survey both indicate that Americans feel good about their finances, U.S. Department of Commerce figures show that U.S. retail and food service sales fell 1.2% in December 2018, the biggest monthly drop since September 2009, according to The Wall Street Journal.
These mixed signals have presented challenges to analysts who are looking to determine just how well the U.S. economy is doing. According to a recent report in The Wall Street Journal, economists say the outlook for the U.S. economy as a whole is a little more uncertain than normal — in part due to the recent U.S. government shutdown — and that it may be a while before the general picture becomes clearer.
Bottom line
Despite debate among experts over America’s general economic outlook, the recent Gallup survey suggests that at least on the individual level, Americans are feeling confident about their financial futures for 2019, perhaps because they’re feeling the positive effects of low unemployment and rising wage growth.