A new study from Santander US reveals that many middle-income Americans feel optimistic about their economic trajectory, but continue to tackle the uncertainty surrounding tariffs.
A mid-June survey conducted in the morning consultation and released Monday found that 75% of middle-income Americans (who make between $53,000 and $161,000) believe they are on their path to financial prosperity. However, over 80% expect prices to continue to rise, with nearly two-thirds of recent home buyers reporting payroll.
Steven Cates, a certified financial planner at Bankrate, said middle-income households are feeling pressured. “Inflation has created emotional nightmares for most people who are paying their bills and trying to enjoy life,” he said.
Buying a customs fuel accelerator vehicle
Concerns about rising costs and potential tariffs have influenced consumer behavior, particularly among car buyers. The survey found that 55% of respondents are considering purchasing a vehicle. This is the best number Santander has seen in two years. Of those planning to buy within a year, 42% said they raised their purchase timeline for fear of high costs associated with tariffs.
Cates said many buyers are now acting to avoid sudden price hikes. “They don’t want to be hit with another $5,000 to $10,000 extra in cars next year,” he said. Automakers are already feeling its effective. General Motors recently reported a $1.1 billion hit from tariffs in the last quarter. Cox Automotive has named the tariff a major obstacle to the affordable price of the vehicle.
Changes in views on housing costs and homeownership
Santander’s findings show that almost three-quarters of recent home buyers are cutting their spending to manage homeownership costs. At the same time, over 60% of tenants say that rentals are more affordable than purchases, and many have expressed comfort in long-term rentals. 60% of respondents said ownership of a home is no longer a major indicator of financial success.
Careful confidence in the labor market
While 79% of respondents feel safe at their current job, three-quarters are currently directing their bills, the labor market shows signs of cooling. The latest recruitment and labor turnover summary (JOLTS) report shows a low 1% firing rate at a slower rate of 3.3%. Economists say this reflects employment moratoriums rather than unemployment.
Stephanie Gichard, a senior economist at the conference committee, said unemployment rate remains low at 4.1%, but workers are beginning to notice that it is becoming more difficult to find new employment opportunities.
Inflation remains the number one concern
Despite slight easing, inflation remains a major financial concern. However, many middle-income Americans report that they are equipped to handle higher costs than they were a year ago. Over 80% adjusted by reducing spending, skipping trips, and soaking in savings. Recent wage growth, which outweighs inflation, has helped some families begin to recover from the price surges during the pandemic era.
Santander said it focuses on topics like homeownership, car buying and inflation, as it closely matches the financial products the company offers. The study highlights both the resilience and continued vulnerability of American middle-income earners in navigating complex economic situations.
