Americans Are Worried About These 3 Aspects of the Economy — Should They Be?
Written by
J. David Herman
Edited by
Zuri Anderson
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
Inflation continues to weigh heavily on Americans’ minds, coming in at or near the top among economic worries in recent surveys. Whether it merits that level of worry is open for debate.
Inflation topped a recent YouGov/Economist poll on Americans’ biggest concerns, not just for the economy but overall. In a Clever Real Estate survey on consumer sentiment, 94% of Americans listed inflation as a top economic worry.
While high prices — or at least prices that feel high — continue to strain budgets, not all economists believe that level of concern is warranted. Robert R. Johnson, a professor of finance at Creighton University’s Heider College of Business, advises turning that particular worry meter down for now and seeing how the Trump administration’s economic proposals play out.
“Americans should not fear inflation currently,” Johnson said. “But given the tax cuts advocated by the Trump administration, inflation could be a significant problem longer term. The budget deficit will rise dramatically if Trump’s tax cuts are enacted. Additionally, inflation will be stoked if significant tariffs are in place for any length of time.”
GOBankingRates breaks down the larger worries around the U.S. economy, and whether Americans should be on high alert or not.
Inflation Has Cooled, but How Does It Feel?
Price increases have cooled compared to spikes seen in recent years, though many costs are still higher than they were before the surge. As measured by the Consumer Price Index, inflation rose 2.3% over the 12-month period that ended in April. That’s actually the lowest increase for the all-items index since February of 2021. It’s also down from the 2.4% increase for the 12-month period that ended in March.
Belinda Román, an associate professor of economics at St. Mary’s University in San Antonio, Texas, noted that some level of inflation is always expected, and 2.3% is close to levels targeted by Federal Reserve. Nevertheless many of us have come to define inflation as prices feeling too high, rather than prices increasing significantly.
“A lot of the economy is perception,” Román said. “People may think inflation has run away, when it hasn’t really.”
“We notice it at certain times of year,” she added, citing increasing gas prices as summer draws closer.
Rising Insurance Costs a Real Concern
The only item listed more often than inflation in Clever Real Estate’s survey of economic worries? The rising cost of all types of insurance. A whopping 95% of respondents listed increasing insurance costs among their top economic concerns.
Homeowners’ insurance rates surged by 24% between 2021 and 2024, according to a report from the Consumer Federation of America. These increases haven’t been limited to disaster-prone regions, with rates climbing nationwide due to inflation and higher repair costs. That said, a recent spate of disasters is having a widespread impact.
“This is putting a lot of pressure on insurers,” Román said. “Even if it’s not happening where you are, it’s reverberating throughout the country.”
Auto insurance has also seen sharp increases, with premiums up 0.6% in April and 6.4 over the last twelve months ending in April, based on the Consumer Price Index.
“There is no magic bullet to control these costs,” Johnson said. “The rising cost of insurance is certainly changing the attractiveness of certain housing markets, particularly for retirees.”
Cuts to the Federal Government
Cuts proposed by the Trump administration were also prominent in Clever Real Estate’s survey on top economic worries. Among those figures:
- Only about a third of respondents supported recent mass layoffs at many federal agencies, with 82% expressing worry about federal spending cuts.
- Three quarters of those surveyed said they would feel an impact on themselves or their families if cuts reduced assistance programs like Social Security, Medicaid, food stamps, and benefits for veterans.
“There is a great deal of uncertainty with respect to federal government spending, particularly programs like Medicaid,” Johnson said. “Historically it has been political suicide to advocate for cuts in programs like Social Security or Medicaid. But there is a great deal of uncertainty with respect to the future of these programs in the current political environment.”
“I wouldn’t say it was irrational for those who are retiring to claim Social Security earlier than they might have, given the uncertain political environment,” he continued.
Cuts to Medicaid and food stamps could affect millions of low-income Americans, forcing states to shoulder more of the costs or reduce benefits. It’s all part of a philosophical debate about who should be responsible, and who should pay.
“We haven’t done this since… you may need to go back to Reagan,” Román said. “We’re having this national conversation again.”
More From GOBankingRates
