Some consumers admit they are ill-prepared for a possible economic downturn in the next six to 12 months.
10/23/2019 12:00
As economists continue to watch for signs of a possible recession, 40% of consumers report they are not prepared for an economic downturn in the near future, according to Bankrate’s October Financial Security Poll.
Of those consumers, 24 % said they “were not very prepared” while 16 % said they “were not prepared at all” for a recession.
Bankrate’s Third-Quarter Economic Indicator survey shows experts report a 41% chance of a recession before the 2020 elections.
Meanwhile, many consumers also polled in the October survey are taking steps such as saving money and paying off debt to prepare for a possible recession. Nineteen percent of consumers said they are “very prepared” and 41% reported they are “somewhat prepared.”
“Saving more for emergencies and paying down credit card debt are especially important steps to be taking, as fewer than one in five households has sufficient emergency savings and the average credit card rate is over 17 %,” said Greg McBride, CFA, Bankrate’s chief financial analyst, in a news release.
Additional findings on consumers’ steps to prepare for a possible recession include:
- 44 % said they are spending less;
- 33 % said they are saving more for emergencies;
- 31 % said they are paying down credit card debt;
- 15 % said they are saving more for retirement;
- 10 % said they are looking for a better or more stable job;
- 31 % said they are doing nothing.
Spending less money was the most common response across consumers of all age groups and income levels in the survey, according to Bankrate.
“This is notable … because more than two-thirds of economic output is tied to consumer spending,” McBride said.
Read more findings from the survey here.
Related Content from ACA International:
ACA Cast “The Economy: Preparing for What’s Around the Corner”