Divided outlook: How Americans see the economy—and their wallets—in 2025

Key findings:

• The share of Americans who rate the economy as “good” or “excellent” declined from 29% in December 2024 to 23% in March 2025.
• 46% now say the economy is getting worse—up from 38% in December.
• Economic sentiment remains sharply divided by political affiliation.
• 58% of Americans are more concerned about inflation than they were at the end of 2024.
• Most say they’ll spend more on essentials in the coming year—mainly due to rising prices.
• 47% expect to delay major purchases like cars or homes.

Economic uncertainty has been a defining feature of 2025 in America. Ongoing shifts in trade policy, persistent inflation concerns, and recessionary whispers have kept both consumers and markets uneasy. But how do Americans themselves perceive the current state of the economy? And how do they see their personal financial trajectories evolving over the next year?

Americans’ view of the economy continues to worsen

As the U.S. enters the second quarter of 2025, public views of the economy have grown increasingly pessimistic compared to the end of last year. In December 2024, 29% of Americans said the economy was in “good” or “excellent” shape. By March 2025, that share had fallen to 23%. Meanwhile, the proportion describing the economy as “fair” or “poor” rose from 68% to 74%.

When it comes to the overall trend of the economy, Americans are more divided than they were in December. The proportion who believe the economy is worsening increased from 38% in December to 46% in March. However, those who believe the economy is improving also rose slightly, from 20% to 23%. Fewer people now say the economy is staying the same—down from 35% to 24%–suggesting growing polarization in how people perceive change.

Political affiliation appears to play a significant role in shaping these views. In Trump’s America, Republican are fantastically more optimistic than either Democrats or independents. In March, 47% of Republicans said the economy is improving, compared to just 7% of Democrats and 16% of independents. Meanwhile, 76% of Democrats and 51% of Independents believe the economy is getting worse, compared to only 14% of Republicans.

Americans’ personal finances show signs of strain, but future hopes persist

While assessments of the national economy are gloomy, Americans are somewhat more mixed when it comes to their own finances. YouGov conducted a survey in April 1–2, 2025, to find out how Americans view their personal financial futures.

As of April 2025, 36% say their household financial situation is currently good, while 30% say it’s bad. One-third (33%) believe their situation is improving.

Looking ahead to a five-year horizon, Americans are cautiously optimistic: 32% say they expect to be better off financially in 2030, while 21% expect to be worse off and 31% expect to be in the same position.

However, political identity again shapes these projections. Forty-five percent of Republicans believe they’ll be better off in five years, compared to 27% of Democrats and 31% of Independents. Democrats are more likely to predict financial decline (21%) or say they’re unsure (18%).

Inflation concerns are growing in first months of 2025

One of the major stressors on personal finances is inflation, and concern about rising prices has leapt upwards since the end of 2024. In the April survey, 58% of Americans said they are now more concerned about inflation than they were late last year—including 40% who are much more concerned. Only 15% say they are less concerned, and 23% report their level of concern has stayed the same.

Partisan differences are once again stark. Among Democrats, 60% say they are much more concerned about inflation, compared to just 15% of Republicans. In fact, a third of Republicans (34%) say they are now less concerned than they were at the end of 2024—suggesting that views on inflation, like broader economic sentiment, are strongly shaped by political identity.

Americans expect to spend more—especially on essentials

Americans are adjusting their household budgets in response to inflation. When asked about the coming 12 months, 40% say they expect to spend more on essential items such as groceries, utilities, and housing. While many expect essentials to cost more, a large share of Americans plan to cut back on extras. More than two fifths (43%) say they’ll spend less on non-essentials in the coming year. Just 17% expect to increase spending on non-essentials like dining out or entertainment

The majority of those planning to spend more on essentials (89%) say the reason is rising prices, not increased consumption. For non-essential items, 63% also cite higher costs as the primary driver. This suggests that expected increases in spending are largely reactive, not discretionary.

Political affiliation once again reveals important differences. More Democrats (45%) then Republicans (31%) say they expect to spend more on essentials. Among those who expect increased spending, 96% of Democrats blame inflation, compared to 74% of Republicans—20% of whom say they simply plan to buy more. A similar pattern emerges for non-essential purchases: Republicans who expect to spend more are more likely to say it’s because they want to (59%) than because of price increases.

Many Americans plan to save less and delay major purchases

Americans are also reconsidering their approach to savings, credit, and large financial commitments. About one-quarter (26%) say they expect to save less money over the next 12 months, while 23% expect to save more. Meanwhile, 25% say they plan to rely less on credit, with just 14% expecting to rely on it more.

Republicans again report greater financial optimism. Twenty-eight percent say they plan to save more—higher than the 21% of Democrats and Independents who say the same. Republicans are also more likely to say they will reduce their credit use (31%) compared to Democrats (23%) and Independents (23%).

When it comes to big-ticket items, Americans are particularly cautious. Nearly half (47%) say they are less likely to make a major purchase in the coming year. Just 14% say they are more likely to do so. Among Democrats, 54% say they are likely to delay major spending, compared to 36% of Republicans and 47% of Independents.