The US economy continues to send mixed signals amid both continued job growth and ongoing—but slowing—inflation. In response, the Federal Reserve has temporarily paused interest rate hikes to “assess additional information and its implications for monetary policy,” but the agency has also indicated that there will be two more rate increases before the end of the year. How are Californians faring in this muddled financial environment? Even though the vast majority expect bad economic times ahead, most say that they are personally holding steady.
A slim majority (53%) of adults say they and their family are in about the same financial situation that they were in one year ago, according to the June PPIC Statewide Survey. Meanwhile, one-third say they are in worse shape than they were 12 months ago, and 14% believe they are better off. About three in ten or more have said they are worse off since November 2021, when Californians were more likely to say their finances were about the same as the previous year.
Today, being in about the same shape is the most common response across all partisan, regional, and demographic groups, with the exception of lower-income Californians. Those earning less than $40,000 annually are about equally likely to say they are worse off (48%) or in about the same shape (45%) as last year, while 7% say they are better off. The shares of Californians saying they are better off increase with rising educational attainment and income.
Californians largely see a gap between the state’s rich and poor residents. In our most recent survey, 68% of Californians say the state is divided into “haves” and “have nots,” while 30% do not think the state is divided this way. These views have been similar in our surveys dating back to 2011.
When it comes to placing themselves in one of these groups, Californians are equally likely to say they are in the haves (49%) as in the have-nots (48%). The share classifying themselves as being in the haves is the highest it has been since the record high measured in our September 2002 survey (60% haves, 32% have-nots).
Today, there are some notable differences among demographic groups. African Americans, Asian Americans, and Latinos say they are in the haves less frequently than do whites, and the share saying they are in the haves rises sharply with educational attainment. The percentage saying they fall into the “haves” bucket is highest among those earning $80,000 or more, college graduates, homeowners, and whites; the shares saying they are in the have-nots is highest among those earning less than $40,000, African Americans, renters, 18-to-34-year-olds, and those whose highest level of education is a high school diploma.
Although inflation has begun to cool, warnings of a potential nationwide recession linger and 76% of Californians expect bad economic times in the US in the next year. Further, our survey results also reveal that a majority of residents have personally experienced recent financial hardship due to high prices—with lower-income Californians mostly likely to have experienced hardship. PPIC will continue to track views on the economy and personal finances as our state and national leaders navigate these choppy economic waters and as Californians look for some relief in their pocketbooks.