December Report: 40% of Consumers Pessimistic About Economy

As the COVID-19 pandemic continues its spread across the U.S. and around the world, people are becoming increasingly troubled about the state of the economy, with 40% telling PYMNTS they’re pessimistic about economic conditions, the highest level we’ve seen since we started this series. 

It’s also up from 32% in May, which means there are 20% more people who are pessimistic about the economy today than we saw in the springtime. Our data shows optimism about the economy is dropping too, down from 44% in May to 34% in October. 

It’s no surprise that 46% of consumers living paycheck to paycheck and struggling to pay their bills are pessimistic about the economy, while 32% are optimistic and 22% are neither pessimistic nor optimistic. Among those who live paycheck to paycheck but aren’t struggling to pay their bills, 41% say they are pessimistic about the economy, 34% are optimistic and the remaining 25% are neutral. 

The December 2021 edition of “Reality Check: The Paycheck-To-Paycheck Report” and previous PYMNTS research shows that many consumers are ready to return to pre-pandemic shopping habits once the ongoing health crisis fades — if it ever does.

People “have a lot of disposable cash — and now that things are coming back to normal, they’re going to dispose of it,” Mark Cohen, director of retail sales at Columbia Business School, told The Washington Post. 

At the same time, four out of five consumers worry about rising costs. That number has been climbing steadily since June. PYMNTS’ data finds that almost one in five consumers has not yet recovered economically from the pandemic’s fallout, and those people may be the most likely to need short-term credit or other tools to negotiate temporary financial obstacles. 

For the latest “Reality Check: The Paycheck-to-Paycheck Report, the Rising Inflation Threatens The Post-Pandemic Recovery edition,” a PYMNTS and LendingClub collaboration, we heard from a census-balanced group of 2,366 consumers between Oct. 5 and Oct. 8, 2021, on how they have navigated the pandemic. 

We learned that 82% of U.S. consumers are worried about rising costs, with those living paycheck to paycheck especially concerned about ongoing inflation. On top of that, only 14% of the people we talked to say they have recovered financially after suffering setbacks when the COVID-19 outbreak started early in 2020. 

Overall, one-third of consumers say their personal financial situations have gotten worse because of the coronavirus pandemic.