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The Uneven Economic Recovery Is Cementing Financial Anxiety for Millions of Consumers

By Tim Barlow | July 16, 2019 | 0 Comments

MarketingMarketing, Consumer, and B2B Insights

In defense of a booming economy … this is no sugar high.1 Consumers are probably used to seeing effusive, bordering on defensive, headlines like this, detailing the various tenets of an unstoppable economy. Rising GDP, the longest bull market in history, the lowest unemployment rate in nearly 20 years and consumer confidence at the highest level since 2004 have all been cited recently to remind consumers they’re living in boom times. But what these stats don’t show is that for many, maybe even most, consumers, this “booming” economy feels more like a bust, and the mental wounds caused by the Great Recession aren’t so much healed as they are shoddily stitched up.

Marketers, take heed: There’s a potent disconnect between the positive economic indicators of late and the way consumers feel every day. And to lean into the “boom” and forget the reality on Main Street is to risk appearing tone-deaf and out of touch to a substantial contingent of consumers. Consumers expect another downturn soon, further eroding an already fragile consumer psyche.

Positive Indicators Gloss Over an Uneven Recovery

Employment: Unemployment may be at a historically low 3.7%,2 but “underemployment” — the percentage of individuals who would prefer to be working more hours or in a position that more fully utilizes their skill set — is perhaps a better measure of health for the modern labor market.3 Thirty-three percent of college graduates and 40% of recent college graduates are considered underemployed4 — a rate that remains unchanged since before the Great Recession. Consumers recognize this discrepancy. One Ohio resident sardonically tweeted in response to yet another “positive” jobs report: “Yeah, you’re not ‘unemployed’ if you work part-time. You can’t live on your wages, but golly you are employed.”5

Wages: Wage growth is another important factor in how consumers perceive their current and future prospects, and the hourly inflation-adjusted wages received by the typical worker have barely risen since the 1970s, growing only 0.2% per year.6 Recent gains are keeping pace with inflation,7 but they are below pre-recession levels,8 doing little to help consumers feel as though they’re actually getting ahead, especially in the face of deepening debt and more pervasive income inequality.

Retirement: Markets lost more than 30% of their value toward the end of 2008, hurting retirement portfolios. Though the market has since fully rebounded, 40% of households headed by people age 55 through 70 (roughly 15 million households) lack sufficient resources to maintain their living standard in retirement.9 This lack of preparedness is having real consequences: The rate of people 65 and older filing for bankruptcy today is three times what it was in 1991.10 Still more troubling: At current savings rates, retirement preparedness forecasts for both Xers and Millennials are even bleaker than they are for Boomers.11

Housing: While housing prices have rebounded (and then some) since the recession, ownership rates remain well below pre-recession levels.12 Not only are many people who had homes before the recession unable to purchase again, but starter homes, which have allowed younger consumers of previous generations to begin building personal wealth, are increasing in cost faster than incomes.13 This puts many would-be buyers in challenging positions. The number of renters who said they’ll need to wait at least five years to purchase a home has increased from 23% to 36% over the past three years.14 And even when first-time homebuyers are able to get into a house, the higher prices may be putting them at financial risk. In fact, in January 2019, more than a third of first-time homebuyers said they no longer felt financially secure after purchasing.15

A Recessionary Mindset Persists for Consumers

While the recession technically ended in 2009, the impact of that downturn on consumers’ attitudes and behaviors persists. Perhaps ironically, this is particularly true for Millennial and Gen Z consumers who, despite being largely too young to experience the Great Recession firsthand, came of age during the uneven recovery that followed, solidifying a new-normal outlook characterized by elevated levels of financial anxiety and uncertainty, even at higher income levels.16

Not only did the Great Recession change, perhaps permanently, the relationship and outlook that consumers have with their money, it also altered their underlying perceptions about the foundations and stability of wealth. Previously sacrosanct beliefs about housing, retirement, employment, education, institutional trust and upward mobility all eroded with the downturn, leaving division and consumer scarcity in their wake.

Given this reality, marketers must begin by acknowledging that for most consumers, the recession never ended. At least a portion of your would-be customers are likely living with a persistent recessionary mindset, despite America’s “booming” economy.

For more, read “What Recovery?” (subscription required).


  1. “Editorial: This Is What a Booming Economy Feels Like.”Chicago Tribune.
  2. Bureau of Labor Statistics. 
  3. “Why the Fed Should Target Underemployment, Not Unemployment, as It Sets Interest Rates.”com.
  4. Federal Reserve Bank of New York. May 2019.
  5. Twitter.
  6. “Why Wages Aren’t Growing in America.”Harvard Business Review.
  7. “Worker Wage Gains Are Keeping Up With Inflation, and Then Some.”
  8. “Wage Growth Tracker.”Federal Reserve Bank of Atlanta.
  9. “A Generation of Americans Is Entering Old Age the Least Prepared in Decades.”The Wall Street Journal.
  10. “Graying of U.S. Bankruptcy: Fallout From Life in a Risk Society.”Social Science Research Network.
  11. “Self-Service Retirement Planning.” Gartner Consumer Insights. 16 October 2018.
  12. “Homeownership Rate for the United States.”Federal Reserve Bank of St. Louis.
  13. “The Average Price of a Starter Home Across the U.S.” The Balance.
  14. com. May 2017.
  15. “Recent Home Buyers Stretched, Future Hunters Optimistic.”
  16. Gartner Affluence and Class Survey. March 2018.

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