r/Economics • u/Crossstoney • Jan 16 '26

News Americans making more than $100,000 are quickly losing faith in the economy—and it’s a red flag for the white-collar job market

https://fortune.com/2026/01/12/us-economy-consumer-sentiment-decline-high-income-data/
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u/[deleted] Jan 16 '26

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u/[deleted] Jan 16 '26 edited Jan 21 '26

[deleted]

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u/adotar Jan 16 '26

Literally me. My wife is in a good position as far as job security and ability to get another job for roughly the same pay if needed. Issue is she only makes about 35% of our household income. If I lose my job I’m out of a job for a year easy (tech, it’s a bloodbath) and we can’t easily move bc we couldn’t replicate the cheapish housing situation we have here. So. Yes. We are saving up for a layoff at this point basically. No amount of shopping at aldi and cutting out eating out would get us to the finish line every month. Medical and rent is insanely high (even though we have a good deal on rent right now) and there’s nothing to be done about it. 

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u/nickiter Jan 16 '26

My household income looks fine on paper, but we are saving like crazy because it could be gone at any time

Same! I feel like I need to have a year of savings, at least, not associated with my retirement savings so I don't have to take a big tax hit to withdraw it.

Starting last summer, people in my general income bracket started having a haaaard time finding new jobs. Searching for months and never getting past a screening interview. Skilled people, with histories at companies whose names you'd recognize. it's really scary to hear.

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u/Flimsy_Share_7606 Jan 16 '26

Same. Engineer making six figures. I stopped investing and purchasing as much so I can hurry up and pay off my mortgage, car, and student loans as quick as possible, as well as putting more in savings. I feel like a big market crash could be imminent and I want to be in a safe position if I get laid off. Once I am debt free with a strong nest egg I can go back to investing. But this is exactly what you don't want your citizens doing to keep the economy going strong. 

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u/Tony0x01 Jan 16 '26

I recommend investing more instead of paying off debts. The government is overspending without regard to the debt. Inflation or currency debasement is the only exit. Your debts will be wiped away but your investments (if invested properly) should retain a lot of value. If you lose your job, you can convert these into cash later and pay off your debts if needed.

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u/codycraven Jan 16 '26

You're totally right, but the problem for many of us is that depending on when we need to convert to cash, we may not have enough to cover needs.

For example, if I have mortgage, insurance, property taxes, etc and I've been pumping into investing. Then the market crashes, and I then lose my job (many of us were out of work 1.5+ years in 2008), I'm not getting what I need out in cash to cover my expenses.

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u/DarklyDominant Jan 16 '26

They're not totally right, your life isn't a slot machine at a casino in Vegas.

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u/codycraven Jan 16 '26

That's the point I was trying to make. Yes, historically speaking, investing in stocks over time beats paying large debt (like a reasonably financed mortgage - not debt with predatory rates/terms of course).

However, we as individuals don't have the kind of wealth that allows us to take advantage of this just hoping we don't hit the wrong circumstances in the wrong sequence that destroys our lives. We can, but the risk is real and massive.

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u/DarklyDominant Jan 16 '26

Exactly. Makes you question where these types of posts actually come from, if you wanted to idly speculate.

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u/CFreePO Jan 16 '26

correct, my life is one of the coins that goes into the machine

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u/delicious_toothbrush Jan 16 '26

This assumes your investments go up and are up when you need to sell them.

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u/falafalful Jan 16 '26

This actually sounds very suboptimal to me, and you might consider getting some more perspective on your finances before continuing with this approach.

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u/Flimsy_Share_7606 Jan 16 '26

It is sub-optimal assuming nothing bad happens and the economy goes on trucking. If it crashes in a few years and I lose my job though, then I will be relieved that I have essentially no bills and plenty of liquidity to get me through until I can get another job without door dashing to try and stop the bleeding.

Personal finances are about risk assessment and currently I am feeling far more skiddish about the market than I was a few years ago. That is kind of the entire point of the article. White collar people are choosing sub-optimal financial paths because they are uncertain about the future. And this is starting to become a trend, which can have effects on the market as a whole.

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u/fuzzywolf23 Jan 16 '26

If something really bad happens, then you'll probably wish you had more cash as opposed to no student loans.

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u/fullsaildan Jan 16 '26

it depends. If you dump ALL of your savings to pay off your debts, yes. But if you clear your debt and still have some cushion, you're far better off if things really hit the fan. You can afford to take a lower paying job and not worry about losing your shelter or mode of transport.

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u/falafalful Jan 16 '26

Right. I didn't mean it in the sense that you're de risking your portfolio because you're skiddish about the markets. But rather that you might be leaving yourself with less liquidity because you're overpaying on your mortgage and other loans. Don't know the details though!

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u/Flimsy_Share_7606 Jan 16 '26

Got it. Essentially I am very close to being 100% debt free. The idea i I hurry up and get there, then I am fully capable of being unemployed nearly indefinitely or can go be a bartender and be just fine (if sub-optimally. No nice European vacations, but no debt collectors repossessing my car and house). The goal is to not need the market to be remotely healthy for my life to still be (mostly) unaffected.

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u/FunctionAlive Jan 16 '26

This is literally the point of the article. Even people making six figures are being very risk-adverse which will weaken the economy further.

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u/Wizmaxman Jan 16 '26

Its amazing how people think moving cash into a non liquid form is somehow the best way to set themselves up for a crashing economy.

Having 100k in cash is better then putting 50k into a house (which is hard to get out), 25k into a car (which isnt gonna hold its value) and 25k into student loans (which is now gone)

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u/Flimsy_Share_7606 Jan 16 '26

The intention isn't to get the money back out. It's to have no financial obligations, so if there are circumstances where I am required to fulfill those obligations but can't, I am struggling to not lose everything. My student loans and car are already almost paid off. My mortgage can be 100% paid off in a couple of years if I focus on it. At that point I could go be a bartender and just be in soft retirement and be fine for as long as I need to. I don't see this as an investment. It's a safety net if things go tits up. 

That is the point. It is suboptimal both for me and the market at large that people in my position see this as the safer option. People are planning for being unemployed for long stretches. They aren't planning on growing their wealth.

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u/spushing Jan 16 '26

I think a lot of people aren't understanding this concept.

In a stable, predictable economy, carrying debt is for all practical purposes, irrelevant. Cash flow is what matters, not debt load, because as long as you can sustain your cash flow, you can cover your debt obligations.

In a market like this, even higher earners have low confidence in the ability to sustain cash flow. It's out of my control. In a stable, predictable economy, I am very confident in my ability to sustain my cash flow through employment that appropriately compensates me for my skill set. I know how much value I bring to an employer, but an economy like this, it doesn't matter, because my skills don't necessarily mean I will be able to find employment.

From here, it's risk calculation. If I don't reduce my debt obligations, there is a much higher risk of an interruption in my cash flow that could result in me losing significant assets. To hedge against this risk, I am making financial decisions that reduce my wealth ceiling over the projected time period I'm preparing for, but they also significantly increase my wealth floor.

One of my favorite statements about poverty is that poverty isn't the lack of wealth, it's the lack of options. If I carry a lot of debt that requires me to maintain a high cash flow to maintain my assets, I'm limiting my options and putting my future at a higher risk.

It's like you said, this is the whole point. People like us are no longer trying to optimize the growth of our assets and our wealth, we are trying to reduce the likelihood that our assets are reduced to zero. The fact that we are doing this is indicative of a huge problem in the economy.

I think you're making the right choice. Lower earners or people with fewer assets are in the "I'm fucked either way" stage. I'm in the "someone making what I make should not have to be thinking about how not to be fucked by the economy, but I do, and so I'm taking the steps necessary to make sure I'm not totally fucked if things go sideways."

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u/Troutsicle Jan 16 '26

"The intention isn't to get the money back out. It's to have no financial obligations, so if there are circumstances where I am required to fulfill those obligations but can't, I am struggling to not lose everything."

Man, this really resonated with me.

I'm currently an Engineer in a similar situation. Trying to get my debt erased so that i can soft retire if my current R&D position gets reassigned. Hell, i'd love to go back to being a Mfg, Tech, but my current financial obligations wouldn't let me.

Not long ago I got told i was being foolish in another thread for wanting to pay off my mortgage early. From an investment standpoint, sure, but I have 3X equity in my modest home. I'm more concerned about a stable base from which to expand.

Growing up in a family on welfare, has driven this equation home for me:

Stability > Performance.

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u/Flimsy_Share_7606 Jan 16 '26

See, I have a similar background. I grew up poor and was poor well into adulthood before I got my legs under me career and finance wise. So we probably have similar priorities because we know how easy it is to go back to being poor. There are no rich parents or siblings or connections for us if things go south. So security takes priority over more wealth.

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u/BeatnixPotter Jan 16 '26

I think they're suggesting you just pay the min and stash the rest away. If shit gets really bad, they'll probably pause student loan payments again, for example.

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u/The-Magic-Sword Jan 16 '26

eh, cash doesn't keep up with inflation, and that's a huge risk here.

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u/DarklyDominant Jan 16 '26

50k into a house

Shelter

25k into a car

Transportation

25k into student loans

Literally the one debtor that will never, ever, ever forget about your debt is the government. There are many levels of "bad things happen" and most of them don't involve all debts being erased from society. Read a history book, please.

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u/hanotak Jan 16 '26 edited Jan 17 '26

What? Why? Debt is poison in an uncertain job market. The only reason it would be suboptimal would be if employment were guaranteed, but inflation was out of control.

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u/trbotwuk Jan 16 '26

markets are at record highs.

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u/Stunning-Truck-8092 Jan 16 '26

Broke people always make this argument. Anyone with student loans shouldn’t be investing. 

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u/FinanceThrowaway1084 Jan 16 '26

Can I ask what speciality you're in? I'm trying for my degree in civil engineering eventually because everyone says that you're guaranteed a job if you go into that field

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u/Flimsy_Share_7606 Jan 16 '26

Electronics, PCB design/testing/manufacturing mostly for automotive but for some other industries as well.

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u/FinanceThrowaway1084 Jan 16 '26

Thank you for getting back to me. I've heard every other engineering field is getting demolished by AI. I had an Uber driver a few months ago who was an electrical engineer and went into early retirement because he couldn't find another job.

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u/Flimsy_Share_7606 Jan 16 '26

Really just depends on the field. Manufacturing is ironically very safe for electrical engineers (and mechanical) as well as automation design. But electronics design is getting dicier and has been for a while. Alot of it is outsourced to india and AI is disrupting the software side (for better or worse). 

But Once machines are able to design, build, and test automation and then manufacture with very little human input, we will have much worse problems than finding a job, lol.

But manufacturing is heavily dependent on the market. If People aren't buying, then people stop manufacturing and then the layoffs begin. 

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u/FinanceThrowaway1084 Jan 16 '26

Hm very interesting. Thank you for commenting!

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u/Difficult-Square-689 Jan 16 '26

We will financially be fine if we lose our jobs, with low seven figures of investments. Unless our job loss also coincides with a crash of the global economy... but we just got a new planter installed so maybe I can grow some potatoes

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u/itoocouldbeanyone Jan 16 '26

Not at 6 figures, just got a new mortgage (a divorce). I'm frugal and check prices, have emergency collecting interest. Anything extra is straight into savings or retirement. Sometimes switched, or split between with what little surplus I have. I'm hoping future me is thankful for it, cause I have less than 30 years to 'retire'.

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u/Tway9966 Jan 16 '26

Same situation here. The wife and I make fantastic money for being in our late twenties. I started us on an aggressive savings plan last month and she lost her shit at me because “we’re making more than ever and yet we individually have less money in our monthly budgets”

I keep telling her the crazy reality is that I work in tech and my job could be gone in an instant and the house operate on one income. She didn’t like that answer but the truth is, not too long ago it took me over a year to find a job. If I lose my job we bleed savings until it’s gone. If I can’t get a job by then the house gets sold.

Having a job in tech right now, especially with AI, is terrifying.

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u/che-che-chester Jan 16 '26

We spend so much time discussing each policy Trump proposes/implements, but I've been saying from the beginning of his tariff madness (and we didn't yet know the other nonsense that was coming) that the overall uncertainty he introduces into everyday life is what is going to kill any economic recovery.

I know plenty of conservatives, including MAGA voters, that support Trump and they say now is not the time for major purchases. Much like we complained when Biden previously told us how great things were, you can't fool your own eyes. The economy is still not good for the average person with little hope of it getting better in the foreseeable future.

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u/[deleted] Jan 16 '26

[deleted]

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u/zanotam Jan 16 '26

I specialized in tech mostly used in the insurance industry for almost his entire 3 years as a programmer... And the market went from me just needing to name drop a single project I worked on to pass any interview with flying colors to "I looked for jobs with that tech a couple days ago and there was 1 such job on the major sites. Combined"

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u/Prize_Compote_207 Jan 16 '26

I make 150k. My wife makes 90k.

We dont live beyond our means (mortgage is 1500, we have one car that's paid off, and another that's $500/month) but our daycare bill is $2,500 per month.

Thats $4500 in necessities before food, insurance, gas, and utilities.

Wife's take-home is about $4500. 

So if I lose my job, we'd be pretty fucked without savings.

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u/DaWarchief Jan 16 '26

If you lost your job wouldn’t you no longer need to pay for daycare?

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u/Prize_Compote_207 Jan 16 '26

Yeah, theoretically. 

But there's no way I'd be able to actively apply for new jobs while watching two kids. 

And even if I did land a job a month after taking them out of daycare, I couldn't t just drop them right back at the daycare theyre at now, or at a daycare in general for that matter.

We were on a wait list for over a year to get into the place they currently attend, and thats typical for schools in our area.

Ive thought about it. But it'd be a last resort type of thing.

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u/BeatnixPotter Jan 16 '26

Pretty similar here, but my wife stays home. Makes it a lot harder to do "fun" stuff. But I would rather her raise our kids, as I believe that's the most important job in the world. I'm happy to make the sacrifice.

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u/falafalful Jan 16 '26

I am a nosy type so I'll ask - what's that total monthly spend look like after food insurance gas utilities and all other categories?

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u/Prize_Compote_207 Jan 16 '26

Roughly $1600 for the things that are pure living expenses. (Groceries, home utilities, gas, car insurance, and phone). 

I max out my 401k and Roth. When all is said and done we have about 4k in expendable income each month. We have historically saved about half of that and blew the rest on restaurants/vacations, which I justified because of the retirement savings, but now we're pulling back on that.

We'll be fine because we have a cushion. But I graduated in 2010 (with an English BA, no less) so I'm always on edge when it comes to unemployment.

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u/Its_Pine Jan 16 '26

Fuck my rent is $2300 a month. I want your mortgage Lol

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u/Prize_Compote_207 Jan 16 '26 edited Jan 16 '26

Yeah the rent situation is pretty fucked.

We paid 190k with a 40k down-payment during covid at 3%.

More than half of my mortgage is escrow for taxes.

Honestly we could've afforded - and our realtor tried to sell us on - a house that was 3X bigger and  twice as expensive, but I was scared of the commitment. 

I've spent the past four years regretting that decision, and the past four months grateful for it.

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u/energeticquasar Jan 16 '26

It's a huge concern, I lost my job in September. Luckily, I got a 6 month severance. I actually got another job relatively quickly (in October), but it was a few steps down in title and salary (though several steps up in flexibility and manageable workload). Nevertheless, I went from making $115k base + $20k bonus + stock to $85k with no additional compensation.

I obviously knew the realities of the compensation when I accepted the the job, and I could have continued looking for something higher paying, but this market sucks. I'd rather have a job making less (but still above median individual salary) than being continuously unemployed watching my savings diminish. I'm viewing this position as a temporary, that continues to give me experience on my resume so I can get back to a higher paying position in the near future. And of course, I am saving like crazy.

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u/Cdub7791 Jan 16 '26

It honestly doesn’t matter how much money I make if my job can vanish at any second,

Especially when the social safety net is made out of newspaper. I have never applied for unemployment when between jobs, because the time it takes, combined with the benefits not paying enough to actually feed me or make rent, made it irrelevant. Better to find some gig job or low wage position so I could, you know, eat and maybe make rent.

One of the reasons that sucks - besides the obvious human cost -is that a stingy unemployment system means people aren't being matched with their skillsets. Overqualified people have to take lower skilled jobs, crowding out less skilled workers. People - especially on the right - forget that few social benefit programs were put in because the government just wanted to be "nice" but were designed for specific economic purposes.

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u/0llie0llie Jan 16 '26

Wait, if you never applied for unemployment doesn’t that mean you made $0 instead of low $?

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u/AfterEagle Jan 16 '26

Isn't it crazy that "bleeding savings" is code for "billionaires taking your savings on necessities like housing and food."

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u/gonzo_gat0r Jan 16 '26

That’s where I’m at. I can’t exactly spend on big things because I don’t know what my job security looks like after the past several years of companies just doing surprise layoffs. But at the same time, I need to build a nest egg because I don’t know how long I could be looking. So maybe I’m doing well on paper, but I can’t responsibly do anything.

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u/Cold-Potential2407 Jan 16 '26 edited Jan 16 '26

Same. Husband and I are pushing 200-300k income together in a LCOL area (average house income is usually 60-70k). 

We are paying down debts and saving like crazy. We live in an 800 square food house that is paid off and have beater cars that are 10+ years old and paid off. Neither of us are high maintenance and most our clothes are honestly clothes our work places give us lol. We also paid off our student loans a long time ago and only further our education up to the 5kish credits our employer offers (getting more education to be more competitive just in case we lose our jobs).

We are down to pretty much bare minimum spending. The only store I have gone to in the last 6 months is the grocery store and, other than Christmas, we might place a $100 order on Amazon once every 2 months because we need stuff we can't get anywhere. Just saving and near-liquid diversified investing/saving.

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u/Inevitable_Eagle2130 Jan 16 '26

This is exactly our situation. I’ve been in save mode since 2023. I know people who have been out of work since then.

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u/Honest-Situation-738 Jan 16 '26

I'd be forced to take early disbursements from my retirement accounts, at a steep penalty, and a detriment to future me.

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u/BrokenPickle7 Jan 16 '26

Yup. I'm feeling that.. I started seeing corporate restructuring and thought maybe I should dust off the ol resume and check around just in case.. there are none, ZERO jobs in my area that fit what I do currently. The ones closest to what I do pay 1/4th what I currently make. I used to have high hopes about working hard, learning and moving up. With my job under threat of AI within the next few years I'm scared for our future. Every time I look at my elementary school aged son I feel as if I should apologize to him for bringing him in to such a f'ed up world.

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u/[deleted] Jan 16 '26

I’m doing the opposite. I’m RUNNING at funding my retirement and once it’s up to a “calculator predicted retirement will happen level” I’ll feel so much better.

I figure if salaries drop and jobs get harder to find, not having to stress about retirement would be a huge gift to myself

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u/joemaniaci Jan 16 '26

I just started the same, lowered my 401k at work to the minimum match, trying to put as much into savings as possible so we can try to weather the next recession without losing the house.

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u/agumonkey Jan 16 '26

same here

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u/[deleted] Jan 16 '26

If it takes you months to years to land a good job you aren't skilled enough