A new survey from Gallup shows that Americans feel worse off financially today than at any point in the last 25 years:
That’s 55% of respondents who said their financial situation is getting worse; up from 53% last year and 47% in 2024.
Today’s number is even higher than during the pandemic or the financial crisis in 2008. And this is the fifth consecutive year that more Americans say their finances are worsening rather than improving.
I’m not here to tell anyone how they should feel, but my genuine question would simply be: why?
The current national unemployment rate is at 4.3%.
That’s as low as it’s been over the past 55 years!
Maybe people are disappointed with the stock market?
But I find that hard to believe since the annual returns for the U.S. stock market over the past 3 years have been:
- 2023: +26.3%
- 2024: +25.0%
- 2025: +17.4%
If you had $10,000 invested at the beginning of 2023, your balance would have nearly doubled to be $18,326 today. That’s an 83% total return.
I think most people would feel pretty good about doubling their investable assets over three years.
Perhaps people are enraged at the recent spike in gas prices?
Yet… if you account for inflation over the past 35 years, today’s price doesn’t look that bad:
I know people don’t look at the cost of gas through an inflation-adjusted lens; they just care if it’s more expensive than it was a few months ago. But real (inflation-adjusted) gas prices are lower than they have been over the past three years and basically on par with prices in 1990.
Additionally, if you view gas prices as a percentage of wages (which have grown 20% since 2022), we’re still essentially as low as we’ve been in almost two decades:
This ties into what I expect has the most people up in arms: inflation. If there’s one thing that ticks everyone off, it’s the rising cost of living.
Although even with the higher-than-average inflation we’ve seen, incomes have kept pace. Going back to 2019, incomes have grown 15% higher than inflation:
In the end, I’m not sure why people feel so bad about their financial situations.
Maybe the dissatisfaction all comes back to housing? The market for first-time homebuyers is still a tough one.
It could be social media’s constant stream of negative, clickbait-y headlines that makes us feel like things are worse than they actually are? Or possibly social media giving us full-time access to everyone’s lives, spurring on a constant comparison game?
Morgan Housel writes in his book, Same As Ever:
“Today’s economy is good at generating three things: wealth, the ability to show off wealth, and great envy for other people’s wealth.
It’s become so much easier in recent decades to look around and say, ‘I may have more than I used to. But relative to that person over there, I don’t feel like I’m doing that great.’
We have higher incomes, more wealth, and bigger homes—but it’s all so quickly smothered by inflated expectations.”
Thanks for reading!
Jake Elm, CFP® is a financial advisor at Dentist Advisors. Jake a graduate of Utah Valley University’s nationally ranked Personal Financial Planning program. As a financial advisor at Dentist Advisors, he provides dentists with fiduciary guidance related to investments, debt, savings, taxes, and insurance. Learn more about Jake.