According to nearly half of Americans, the biggest threat to the U.S. economy over the next six months isn’t the Federal Reserve hiking interest rates or burgeoning student loan debt: It’s the fraught political climate in Washington, D.C.
A new study published by Bankrate.com found that 43 percent of Americans believe increasingly divisive politics -- poised to become even more so in January, when Democrats will officially take control of the House -- could rattle personal finances.
“With the U.S. economy seemingly on solid ground in the near-term, the turbulent political environment is generating an increasing sense of unease extending to personal finances,” said Mark Hamrick, senior economic analyst at Bankrate.com. “Resolution of the midterm elections doesn’t change that.
Concerns about politics increased with age, with 32 percent among millennials worried about it, compared to 56 percent of those in the silent generation (73 and older). Households with higher income and higher levels of education also said they were anxious about the effects politics could have on their personal finances.
About one-third of respondents said the threats to the economy were prompting them to save more money, while 23 percent said they were saving less money, according to the survey.
“Low unemployment won’t last forever,” Hamrick said. “We just don’t know how long. The time to make financial hay, to put more money in the bank, is while the sun is still shining.”
Other common issues that people said they were concerned would hurt the economy were rising interest rates (8 percent), stock market volatility (7 percent) and political or economic instability overseas (7 percent).