Most Americans Expect the Economy to Improve in 2025

Inflation continues to pose a financial challenge for many, an Allianz Life study finds.

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Americans are more optimistic about the economy than they have been in years, with 59% expecting improvement in 2025 despite lingering inflation, a new study finds.

The percentage of respondents expecting improvement is the highest since 2020, and 67% expect that their financial situation will improve this year, according to the 2024 Q4 Quarterly Market Perceptions Study from Allianz Life Insurance Company of North America.

This is a good time to invest in the market, according to 35% of respondents, up from 29% last quarter. Optimism about the market is strongest with Gen Z (45%) and millennials (39%), compared with Gen X (30%) and boomers (29%).

“It’s encouraging that Americans are optimistic about the economy,” says Kelly LaVigne, Allianz Life Vice President of consumer insights. “It’s important to use this optimistic time to build a strong financial strategy for the long term. A comprehensive plan can help clients navigate future headwinds while working toward achieving financial goals.”

However, 67% say they worry that changes in the new government will result in more market volatility. Worrying the most are Gen Zers (75%), followed by millennials (67%), Gen Xers (62%) or boomers (67%).

Americans are less pessimistic about inflation. Allianz reports that 60% expect inflation to get worse over the next 12 months, the lowest percentage since the question was first asked in Q3 2021, and 43% say they feel good about the direction inflation is heading.

Most Americans report that they have either stopped or reduced retirement savings (51%), increased their debt (50%), or reduced their savings contribution because of inflation (68%). In particular, Gen Xers (81%) say they fear the rising cost of living could affect their retirement plans.

Many Americans say they are getting professional guidance on inflation, with 76% saying they would stop using their current advisor if that advisor didn’t help them effectively deal with inflation.

 

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