In each year since 2005, Gallup has been asking Americans to name the #1 financial problem facing their family.
In April 2024, a record 41% of those surveyed claimed that the high cost of living/inflation was their #1 financial issue – up from the previous record highs of 35% in 2023 and 32% in 2022.
At 14%, the high cost of owning or renting a home was the 2nd largest financial issue.
Negative Effects on the U.S. Economy
The high cost of living is forcing U.S. consumers to cut back on their spending – which slows the economy and likely explains why the U.S. unemployment rate jumped to a three-year high of 4.3% in July.
The Fed to the Rescue?
The rise in unemployment from a five-decade low of 3.4% in April 2023 to now the highest level since September 2021 may all but guarantee a September interest rate cut from the Federal Reserve, with economists calling for a 50 basis point reduction in borrowing costs.
But don’t be surprised if home prices fall along with falling mortgage rates. Happens all the time during housing market corrections.
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