Donald Trump breaks an unwanted record

A record number of Americans think they’ll be worse off financially next year, marking the highest percentage in either of Trump’s presidential terms of those who are fearing the worst at any point.

According to the Federal Reserve Bank of New York, 38.97 percent of Americans said they’ll be worse off next year financially. The last time it was this high was in November 2023.

“It reflects an economy that is technically growing, but doesn’t feel like it is improving fast enough for regular households,” Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com, told Newsweek.

Why It Matters

The number of Americans who feel they will be worse off financially next year is a key indicator of American sentiment on the economy and often the broader presidential administration.

With new tariffs and inflation still hiking prices on key necessities, many Americans are navigating layoffs and economic turbulence due to the heightened figures.

What To Know

The Federal Reserve Bank of New York also found that mean unemployment expectations, or the mean probability that the U.S. unemployment rate will be higher one year from now—improved just slightly, decreasing by 0.4 percentage point to 42.1 percent.

However, perceptions of credit access became worse, with a decrease in the net share of respondents who expect that credit will be easier to obtain a year from now.

“Inflation has cooled on paper, but prices never went back down, so people are living with a permanently higher cost base for essentials,” Ryan told Newsweek.

“Households feel squeezed from both sides: credit costs more, savings buffers from the pandemic are mostly gone, and wage gains are no longer clearly outrunning the price of everyday life.”

The higher percentage reflects not only rising inflation and declining affordability but also the reality that many Americans aren’t experiencing the “wealth effect” of the stock market, said Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast.

“While Trump has played a role, the broader issue lies in excessive government spending and mounting deficits. Inflation was always waiting behind the door, and now it’s just finally showing its face,” Thompson said.

What People Are Saying

Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com, told Newsweek: “When nearly 39 percent say ‘I’ll be worse off next year,’ they’re not doing macroeconomics, they’re doing kitchen‑table math. Think of a family whose rent jumped 20 percent over three years and whose car insurance is up 30 percent: even if inflation is “only” 3 percent now, their budget never reset lower.”

Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: “There should be no surprise in recent polling that indicates more Americans are concerned about their financial futures in the year ahead. Inflationary pressures have been weighing on consumers every year since the pandemic subsided, and while substantial price increases in some industries have cooled, prices on many everyday purchases are still too high for the majority of families that are on fixed budgets. When you add in headlines of mass layoffs in a number of sectors this year and fears of more job cuts to come, it’s easy to see why many Americans are worried about their personal economic outlooks.”

What Happens Next

The Fed and independent forecasters have been signaling slower growth ahead than the Trump administration’s forecasts, so households are hearing two conflicting stories about the future and “tend to trust their paychecks over press conferences,” Ryan said.

“When the White House insists everything is great and your grocery bill says otherwise, you stop believing the White House, not the grocery bill,” Ryan said.