A growing sense of financial unease is gripping American households as new tariff policies threaten to ignite or worsen inflation and destabilize the job market on top of their existing debt burdens. A January 2025 survey by Achieve Center for Consumer Insights reveals a stark decline in consumer optimism. Fewer Americans expect their finances to improve in 2025 since most are already struggling to keep up with essential expenses and debt payments.
Financial Pessimism and Economic Anxiety Rise in U.S. Amidst Tariffs, Inflation, Job Insecurity, and Debt Obligation
Survey Background
Personal finance experts at Achieve carried out a survey in January 2025 to look into the financial challenges facing American households for 2025 and complement official reports from institutions Federal Reserve Bank of New York by providing qualitative insights into consumer borrowing behaviors and debt trends.
More than 2000 U.S. consumers aged 18 and older who hold active accounts for one or more types of consumer debt, including auto loans, major credit cards with an outstanding balance of at least USD 100.00, first-lien mortgages, home equity lines of credit, student loans, and unsecured personal loans were surveyed.
The sample was augmented with a statistically significant subset of borrowers who had experienced at least one instance of being 30 days or more past due on credit card, auto loan, or student loan payments at least once within the preceding six months to ensure a more robust evaluation of delinquency risks.
Findings
Key findings highlight that many households continue to struggle with debt, inflation concerns, and job insecurity. Their fear or anxiety over these struggles has risen as new U.S. tariff policies raise the possibility of a global trade war. The following are the specific findings:
• Main Economic Concerns: Many Americans are worried that new U.S. tariff policies under the Trump Administration could trigger a global trade war that would reignite inflation and threaten employment security. Fewer households also believe their personal finances will improve in 2025 compared to previous expectations.
• Debt Accumulation: About 26 percent of households reported taking on more debt in the past three months. This is down from 28 percent in late 2024. 35 percent managed to reduce their total debt obligations. This is up 31 percent in the previous quarter. Another 39 percent reported no change in their debt levels.
• Financial Strain: 57 percent are using credit cards to cover essential expenses. 36 percent find it difficult to pay debts on time due to insufficient income, too many accounts, and cash flow issues. Missed-payment risks are rising for credit cards, personal loans, and unsecured debts like buy-bow-pay-later loan schemes.
• Expectations and Reality: A 2024 survey noted that 44 percent of consumers expected their financial situation to improve but only 28 percent reported actual improvement by early 2025. Only 29 percent of the surveyed consumers said their finances worsened and only 47 percent expect their finances to improve in late 2025.
• Student Loan Issues: Federal student loan payments resumed due to shifts in policies and legal issues in the loan forgiveness program of the previous Biden administration. Missed payment risk for student loans fell to 32 percent in early 2025 but uncertainty remains high and many borrowers are hesitant to resume payments.
• Macroeconomic Pressures: There are 3 major factors shaping the financial behavior of Americans. These are inflation, uncertainty in the labor market, and rising essential costs. 29 percent who missed payments cited not having enough money as the primary reason. Job losses and income instability also contributed to missed payments.
Pointers and Takeaways
“We cannot ignore the long-term financial impact debt has on consumers,” said Achieve cofounder and co-chief executive Andrew Housser. “For people struggling to make ends meet and who feel like they have no other option but to take on more debt, it can take months, if not years, to regain financial stability.”
Furthermore, based on the survey, Housser pointed out that consumers are prioritizing essential expenses like rent and utilities over unsecured debts. This reflects short-term financial pressures. He also underscored that the notable performance of the stock market in 2024 provided little relief to people living paycheck to paycheck.
A couple of surveys in 2024 showed that Americans had fallen behind on their debt obligations. This indicated growing and persisting financial hardships. The marked decline in consumer optimism, in addition to persistent debt burdens, further suggests a growing vulnerability within the American economy.