The U.S. economy may be holding up better than expected, but Americans are growing more pessimistic about their personal finances.

Roughly 48% of Americans said their financial situation was worse in May than a year ago, the highest share since January 2023, according to the Federal Reserve Bank of New York's Survey of Consumer Expectations.

Consumers are also less optimistic about the future. The share of households expecting their finances to improve over the next year, relative to those expecting them to worsen, fell to its lowest level since October 2022, the New York Fed said.

The findings come amid an inflation spike driven by the Iran war, which has sent oil and gas prices soaring. The May Consumer Price Index, set to be released on Wednesday, is expected to show that the annual pace of inflation accelerated to 4.2% last month, according to financial data firm FactSet. That would mark the highest level in three years.

The survey also found growing public anxiety about the state of the labor market. About 15% of Americans said they believe they could lose their jobs within the next year, 0.5 percentage points above the series' 12-month average. Meanwhile, confidence in finding a new job fell to its lowest level since December 2025.

Consumers have continued to spend despite financial pressures ranging from tariffs to higher gas prices, while hiring across the U.S. has picked up over the last three months. Even so, signs of financial strain are appearing as gas prices remain elevated, eating into household budgets.

The energy shock is reigniting inflation
Prices rose by 3.8% on an annual basis in April, the highest level in almost three years, according to the Consumer Price Index. Energy prices were a major driver, accounting for 40% of the increase.

For instance, wages rose at an annual rate of 3.4% in May, but inflation the previous month rose at an annualized 3.8%, eroding consumers' purchasing power. Three-quarters of Americans said their wages aren't keeping up with inflation, according to a recent CBS News poll.

Credit card delinquencies across the U.S. have also reached their highest level since 2011, when the economy was still recovering from the Great Recession, according to earlier data released by the Federal Reserve Bank of New York. That jump signals that more consumers are struggling to meet their financial obligations.

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