Pru Pulse: With financial security a priority, recession fears loom

On Wednesday, the Federal Reserve took steps to try to rein in inflation by raising the interest rate again. The next day, the Bureau of Economic Analysis announced that the country’s gross domestic product fell further in the second quarter. But, even before that, the “r” word has been creeping into concerns for a while now.

According Prudential Financial Inc.’According to the latest set of Pulse studies, Americans are bracing for the economy’s next act, 74% of respondents expect a recession within the next two years.

These concerns come in light of the fact that most (51%) of those surveyed said they felt more financially secure than they did three years ago, including 58% of black Americans. However, inflation – currently at a 40-year high of 9.1% – as well as debt have already caused people to change their ways. The Pulse report found that 53% of respondents were making adjustments due to the current economy and 46% were concerned about the future economic situation. Interestingly, concerns about “pandemic-induced uncertainty” trail the others at 32%.

Risk and reward

According to the report, more and more people are seeking advice from unconventional channels (30% turn to social media) or turn to more precarious investments, such as crypto.

Although not highest on the list of antagonists, COVID-19 is still tied to a sense of financial security for Americans through work.

The pandemic has undoubtedly upended priorities when it comes to jobs (whether it’s where people work from or when), but it’s also put more emphasis on the importance of having one to create a foundation More financially sound: The pulse revealed that most workers (63%) said a stable salary is the most important factor in feeling financially secure. In terms of interference with this ideal, an economic downturn was seen as the greatest threat to job security at 46%.

But that doesn’t mean you as an employer can rest on your laurels. The report warns that failing to meet workers’ financial needs could lead them elsewhere – and there are plenty of options these days.

Another thing employers should pay attention to – if they aren’t already – when it comes to attracting and retaining talent is where employees physically do their jobs. According to the survey, about half of hybrid and remote workers said they would never accept a new job that required them to go full-time to an office or job site.

Hiring to help

According to the Pulse report, “Employers who offer benefits that provide flexibility and help support their employees’ financial success can have an edge over their competition.”

If not, how has the pandemic reordered employee priorities? You might not want to hear it, but 64% say they now prioritize their personal life over their career. Mental health considerations have taken a step forward since the start of the pandemic, and this is also reflected in the attitude of workers, with 61% saying they prioritize their mental health over at their work.

Overall, having a job seems to offer a sense of security that is hard to circumvent: 57% of workers said they would choose job stability over salary or benefits. However, more than half of workers (54%) said they seek personal fulfillment from their work, prioritizing the goal over pay or benefits.

fall behind

While Prudential’s Pulse found that many Americans are preparing for uncertainty, it also found that coming out of the pandemic, two groups were already starting to be more disadvantaged. Women have actually lost ground, according to the survey results, while millennials are – yet again – facing the onset of a potential recession, this time as they are expected to enter their peak earning years. students.

Pru’s Pulse found that the pandemic is deepening the financial divide between women and men.

The flip side

Over the past 12 months, I feel like my personal financial situation has been precarious.
Women: 40%
Men: 27%

I am convinced that I would be able to withstand an unexpected financial event, such as an interruption or loss of your income.
Women: 37%
Men: 52%

I am confident that I would be able to cover an unexpected expense, such as a household repair or a medical bill.
Women: 46%
Men: 61%

Overall, the survey showed that women reported facing greater financial insecurity compared to men and possessing fewer financial assets. Together, this creates a “crisis of confidence” for women according to the Pulse. Meanwhile, more than half of men said their financial confidence had increased over the past three years, while just 46% of women felt the same way.

This “crisis” is not contained at the personal level either, with impacts in the professional space. The Pulse found that 38% of women don’t feel fairly compensated for the work they do, and most are uncomfortable asking for a raise (38%) or negotiating a salary (42%) – even less (22% and 16%, respectively). ) have already tried.

For millennials, who started their careers in the midst of the Great Recession, the pain points of the pandemic are acute. The group find it harder to save time than any other generation (72%), according to the survey, are more worried than other generations about their immediate financial security (64%), and worry more about everyday money (62%) .

Looking ahead, the glass is apparently half empty. Nearly half (49%) of millennials don’t think they will ever be able to retire, and the generation remains more skeptical than others about other financial goals (creating personal wealth or owning a home, for example).

The Prudential Pulse Survey was conducted on behalf of Newark-based Prudential by Morning Consult from May 26 to June 3, 2022 among a nationwide sample of 4,000 self-identified employed adults (aged 18 and more). The results for the entire survey population, released on July 27, have a margin of error of ±2 percentage points.

Sarah J. Greer