The state of the U.S. economy has been in flux for much of 2022. According to the U.S. Bureau of Labor Statistics, consumer prices saw their biggest year-over-year jump in 40 years while threat of a recession has also hung over the economy. Even though all Americans have been affected to some extent, the reaction by age group has differed heavily.
A recent State Street Global Advisors Survey highlighted how one generation caught in the middle is particularly worried about the state of the economy.
Millennials are more optimistic about where things are headed, and the same goes for Baby Boomers. But Generation X is facing more concern and taking much larger strides to secure its financial future.
How Gen X Compares to Other Generations
According to the survey, Gen X (which encompasses those born between 1965 and 1980) are much more concerned about the state of the economy than other generations. This includes worries about the effect that it could have on their personal finances — a concern that has not plagued Millennials or Boomers to the same degree.
More than three quarters of those who fall in Gen X are concerned about the economic outlook for the country in the next year. That figure is much lower for surrounding generations, with 65% of Boomers feeling the same and 60% of Millennials.
Gen Xers have also been much more proactive than other generations when it comes to reaction in how they spend their money. About 60% of Gen X have cut back on discretionary spending due to the state of the economy, far outpacing other age groups.
Another interesting note from the survey revealed that Gen X’s economic angst has taken off considerably in the last year.
In 2021, all age groups had similar concern about rising inflation. But in 2022, 88% of Gen Xers were concerned, compared to 72% of Millennials and 70% of Boomers.
The Challenges Generation X Faces
On the surface, it may appear strange that Gen Xers are so much more predisposed to worry about the economy than other generations.
But the answer may lie in the stage of life that they are currently in.
Those who are part of Gen X currently fall in the age range of 42 to 57. The threat of an economic downturn is much more serious given the fact that they are nearing retirement age, especially for those on the older side of that range.
Just a decade or so out from retirement is naturally not an ideal time for rampant inflation to be plaguing the economy and recession concerns to be rising.
According to CNBC, only about a quarter of Americans begin saving for retirement in their 30s or earlier. This means that Gen X is currently both in its peak earning years and in the midst of preparing for retirement.
That can make this a disastrous time for a financial downturn. For Millennials, who have decades of economic swings ahead of them still, the threat of recession or the effects of inflation are not felt nearly as acutely.
The survey found that a sizeable 43% of Millennials believe that inflation has already peaked. Only 5% of Gen Xers felt the same way.
Economic concerns are also potentially less impactful on the other side of the generational divide as well due to the age of Baby Boomers. The youngest Boomers are 58, with the oldest being 76. Much of that generation is well into retirement or close enough where they are no longer in peak earning or saving years.
Gen X is the age group that is caught in the middle and could stand to lose the most from a potential recession.