Most Americans fear a recession, say they aren’t ready

BIRMINGHAM, Ala. (WBRC) - Nearly two-thirds of Americans think a recession is on the horizon — and most say they aren’t financially prepared to face it. That’s according to a new LendingTree survey, which also found that world events, inflation, and tariffs are heavily influencing how people spend.

Chief Consumer Finance Analyst Matt Schulz says that uncertainty is already reshaping behavior.

“There’s no question that people are nervous and it is causing them to pull back on spending,” Schulz said. “It’s causing them to do things like using buy now, pay later loans to buy groceries… and it’s just generally causing this feeling of uncertainty as to what is ahead.”

That hesitation may create a ripple effect across the economy.

“Consumer spending is what our economy is all about,” Schulz said. “So if consumers aren’t spending, it makes it tough on businesses — and if businesses aren’t making money, they’re not hiring people. It has a huge ripple effect.”

The survey found inflation (57%), economic policy (32%) and tariffs (29%) were the top factors influencing financial decisions. More than half of respondents — 53% — disagree with President Trump’s belief that tariffs will lead to a stronger economy.

“Politics play into everything,” Schulz said. “But generally the consensus among economists and folks like that is that the tariffs are likely to make costs go a little higher. There is certainly debate as to whether tariffs are ultimately what the doctor ordered for longer term financial growth.”

“Even the president has talked about the fact that people may need to make some sacrifices in the short term in order for things to get better going forward,” said Schulz.

Consumers may already be feeling that squeeze at discount stores. Retailers like Ross and Walmart have warned that price increases are likely.

“It’s just going to squeeze their budget even more,” Schulz said. “Unfortunately, it doesn’t look like that is going to get better anytime soon.”

“Most people are on tight budgets anyway and don’t have a ton of financial wiggle room — but rising prices just require people to make some tough choices and some sacrifices," said Schulz.

According to the survey, 59% of Americans say they aren’t financially prepared for a recession, and Schulz warns that even small disruptions could have a major impact.

“My general take is that people are doing OK, but it wouldn’t take much for them to not be doing OK,” he said. “Most people are a job loss or an income reduction or a medical emergency or some other big unexpected financial change away from feeling pretty shaky.”

His advice? Focus on what you can control.

“Lowering your interest rate on credit card debt… or maybe saving a little bit more in a new high yield savings account,” he said. “Stuff like that, which may not seem like a game changer right off the bat, but can help you build a little more stable financial foundation to make you better prepared for whatever might come.”

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