Consumers feel so much worse about their finances than last year, new Fed report reveals

Nearly 40 percent of consumers believe their household finances are worse off now than a year ago

’Perceptions about households’ current financial situations deteriorated notably, ‘ the New York Fed reported. (Getty Images)

What a difference a year makes.

The Federal Reserve Bank of New York found consumer confidence about their finances fell sharply compared to last month,according to a November “Survey of Consumer Expectations.”

From October 2025 to November 2025, the percentage of people who felt worse about their finances now, compared to a year ago, went up. The report also found that consumers are more negative than positive about how their finances will look a year from now.

The New York Fed’s report provides consumer sentiment data about a variety of economic and financial issues.

“Perceptions about households’ current financial situations deteriorated notably, with a larger share of respondents reporting that their households were worse off compared to a year ago and a smaller share reporting they were better off,” the survey said.

The percentage of consumers who feel their finances are worse off now compared to last year are more than double those who feel they’re better off (Getty Images)

The report’s household financial situation section gives a look into how people, in general, feel about their financial situation.

The section provides sentiment in two forms: household financial situation now versus one year ago, and one year from now.

Household finances: 2025 versus 2024

Here’s how consumer sentiment about their present household finances compared to a year ago changed from October 2025 to November 2025:

Current feeling about household finances compared to a year ago	October 2025	November 2025	Percentage-point change
Much better off	5.2%	4.0%	-1.2%
Somewhat better off	17.4%	13.7%	-3.7%
About the same	43.1%	43.4%	+0.3%
Somewhat worse off	26%	28.8%	+2.8%
Much worse off	8.4%	10.2%	+1.8%

Overall, consumers felt they were in a worse financial position this year. Their “somewhat worse off” and “much worse off” feelings rose a combined 4.6 percentage points. “Much better off” and “somewhat better off” sentiments dropped a combined 4.9 percentage points.

Some 39 percent of consumers felt like they’re worse off financially now versus last year, which is more than double the rate of consumers who felt they’re better off (17.7 percent).

Household finances a year from now

The following chart shows how consumer expectations of their household finances one year into the future changed from October 2025 to November 2025:

Sentiment about where household finances will be a year from now	October 2025	November 2025	Percentage-point change
Much better off	5.6%	4.0%	-1.6%
Somewhat better off	21.9%	22.5%	+0.6%
About the same	40.9%	42.2%	+1.3%
Somewhat worse off	23.3%	24.8%	+1.6%
Much worse off	8.4%	6.6%	-1.8%

Consumers’ outlook for the year ahead had a better balance between positive and negative expectations. Some 31.4 percent said they expect to be worse off, while 26.5 percent said they expect to be better off. Additionally, there was a drop in the percentage of those who believe they’ll be much worse off financially a year from now.

Why is consumer sentiment getting worse?

While it can be tough to pinpoint why consumer expectations and confidence are struggling, data and insight firm PYMT noted in its analysis of the NY Fed report that around two-thirds of consumers are living to paycheck to paycheck.

That week-to-week instability, along with the fact that around 60 percent of consumers earn their main income outside of a fixed salary, may be feeding feelings of being worse off financially.

“PYMNTS Intelligence research shows many consumers experience income volatility that makes planning more difficult,” the company said.

Other notable findings

The new report includes areas beyond household finances. It takes the pulse of consumer sentiment about the job market, credit access, and inflation, too.

Here’s what the report revealed in those areas:

• Sentiment about unemployment one year from now improved slightly.
• The median feeling about inflation one year from now remained “unchanged.”
• Confidence in credit access (how easy it is to get credit cards, loans, and other lending products) compared to last year was down
• Consumer optimism about credit access one year from now was also down.

Take control

With nearly 40 percent of consumers feeling worse off about their finances now compared to a year ago, low-risk bank accounts can be a good option for earning a safe return if your goal is to save money during tenuous times. Two safe options are certificates of deposit (CDs) and high-yield savings accounts.

CDs

CDs are available through most banks and credit unions. They usually have a maturity date that’s anywhere from a few months to multiple years, and most CDs will charge you a fee if you withdraw your funds before maturity. On maturity, your bank will make available your original deposit and the interest you earned.

It’s relatively easy to find rates above 4 percent right now. CDs offer the advantage of a fixed interest rate - your interest rate doesn’t change, in most cases - and you can avoid an early withdrawal fee by opening a no-penalty CD.

High-yield savings accounts

High-yield savings accounts give you more liquidity than CDs - you typically won’t pay a fee to withdraw money.

However, high-yield savings have a variable interest rate, which can rise and fall each month. During a sustained streak of dropping interest rates, your return will also drop as your account’s interest rate creeps down. The opposite is also true - if rates increase over time, your account’s rate tends to increase, too.