America's hidden economic crisis: personal financial chaos

David Deal's 2026 outlook is what he describes as a "whack-a-mole of worry." While he's 62 and presumably approaching retirement, 65 is "just a number" for him, not a milestone marker for throwing in the towel on his career like his parents' generation. The thing that really has him wound up, though, is healthcare, which he calls a "DEFCON 1" situation. Deal, a marketing consultant who lives in the Chicago suburbs, and his wife pay for their own insurance, and their premiums are going up by 25% next year. He's worried one slip on the ice this winter could mean financial disaster. A family member's recent two-hour trip to the ER cost them thousands of dollars, even with insurance, and the episode has him spooked.

"For me, it's the double-whammy of skyrocketing premiums and also the skyrocketing costs of actually getting care," he says. "We are literally at a point where we can't afford to be sick, and we can't afford to be healthy."

He emphasizes that he means a collective "we" — he knows he's far from alone in his predicament.

"Uncertainty" has been the word of the year for business. Policy whiplash is emanating from the White House — it's hard to keep up with the turmoil around tariffs, immigration, and presidential outbursts toward the Federal Reserve. Anxiety over a potential AI bubble is palpable, even as companies spend on the technology like there's no tomorrow. The stock market is still strong, but it's a bumpy ride. Inflation remains a looming threat. Businesses are clearly on edge.

The focus tends to be on corporate volatility, but for ordinary people, the turbulence is far more personal and far less manageable. Millions of Americans are about to see huge jumps in their health insurance premiums in 2026. Federal workers are coming off the longest government shutdown on record, enduring more than a month without a paycheck. The economy is increasingly unaffordable, and tariffs are likely to exacerbate the problem. The costs of childcare, education, and housing continue to climb. And on the income side, things aren't looking so great as the labor market starts to crack.

The hidden crisis in the American economy is personal insecurity. Even for people who are generally fine, there's a nagging feeling the rug could be pulled out from under them at any moment, whether it's a layoff, a divorce, or next week's grocery bill.

"Households are exposed to much more risk and sources of shock than businesses," says Kathryn Edwards, a labor economist and the co-host of the Optimist Economy podcast. "The risk of shock is getting higher, the cost of shock is getting higher, and the insurance is getting worse."

Americans are ending 2025 significantly more pessimistic about the direction of their financial situations than they were at the start of the year, according to the University of Michigan's consumer sentiment gauge from early December. Its reading on personal finance expectations is 12% below where it was at the beginning of the year. A November consumer survey from the Federal Reserve Bank of New York similarly found that people are increasingly gloomy about their current and future finances, and their expectations for increased medical care costs are at their highest levels since January 2014. The US Economic Policy Uncertainty Index has come down from its spike in the spring caused by the "liberation-day" tariff announcements, but it's still well above where it's been over the past five years.

Some of this is a result of compounded chaos and uncertainty. Practically everything has felt extra iffy since the pandemic. People bear lasting scars from supply chain shortages, where it was impossible to predict whether an item would make it to shelves. It seems like your job could be gone at any moment. And inflation has turned every transaction into an unwelcome guessing game.

"My take on the inflation story is that a lot of that is uncertainty," says J. Michael Collins, a professor of public affairs and human ecology at the University of Wisconsin-Madison. "A lot of that is, 'I enjoyed a world better where I knew kind of what my rent was going to be in three years. Now, I have no idea how much my rent's going to get jacked up in 2028, and that freaks me out.'"

Accompanying this uncertainty is an underlying sense of economic dread. Remember back in October 2022, a Bloomberg headline said there was a 100% chance of recession over the next 12 months? That very certain prediction turned out to be very wrong, but the idea that the economy is perpetually about to go south weighs on people's psyches. It makes them think twice about making a big purchase or hopping jobs.

"It's not normal to spend years turning on your TV with an economist saying you will fall into a recession," Edwards says.

Some of the insecurity is also the result of decades of structural weakness coming to bear. Policymakers have long neglected issues such as the exploding cost of childcare, lagging housing inventory, and a broken healthcare system. The accumulated bill is coming due at a time when the cyclical economy is teetering.

Americans prioritize financial stability over upward mobility, and they aren't getting either one.

Cost-wise and income-wise, unpredictability abounds.

On the cost end of the equation, I probably don't have to tell you about inflation. While it's cooled from its post-pandemic peak, prices are still high and they're still going up. Tariffs haven't stung consumers as much as some economists feared they would, but they're still working their way through the system to people's pocketbooks. The White House is advising Americans to buy less, a message that is not welcome to many consumers. It's also a strategy that's not always possible to execute. You can trade down or buy smaller at the grocery store, but you can't skip eating altogether. In the winter, you've got to heat your house, whatever the bill comes to. You can skip on health insurance, but it's at your own risk.

For Vaughan Nelson-Lee, 31, precarity is just part of being a freelancer, though his 2026 is looking extra precarious. He wound up downgrading his healthcare plan for next year because of premium increases, and he's not enthused about it. "I'm lucky to be an upwardly mobile white guy that makes the median income in Chicago, and I still have my $400 a month I shell out to Blue Cross," he says. He forgoes dental and vision insurance, quipping that "teeth and eyes are a luxury," and he seems pretty agnostic on whether paying for a plan is worth it.

"I went without insurance for a long time, and it's functionally the same as not having insurance," he says. "I'm just a broker, but if I get hit by a car, I'll be less worse off."

The income picture is more of a puzzle. The labor market is frozen — people aren't being laid off en masse, but they're not getting hired, either. Their paychecks are largely meh, and promotions are few and far between. Treading water doesn't feel great, especially when it seems like we could start drowning at any moment.

Elisabeth Jacobs, an associate vice president at the Urban Institute, an economic think tank, explains that while pandemic-driven labor market tightness lifted workers at the bottom, those in the middle remained somewhat stuck. "Inequality has compressed, but it's been entirely just bringing people up and into the labor market from arguably a not great place," she says. The labor market is now weakening, meaning lower-wage workers are losing whatever leverage they had, and middle-income workers aren't doing much better.

Certain pockets of the labor market, in particular, are struggling. The JPMorgan Chase Institute, which tracks financial data, finds that incomes are growing more slowly than usual for workers early in their careers. That's troubling, because that's typically when incomes grow the most, says Christopher Wheat, the president of the institute. On the other side of the career spectrum, workers in their early 50s are seeing their paychecks shrink compared to inflation, and the overall income picture isn't particularly pretty. "We do see income growth falling from where it had been in recent months," he says. "It's not as robust as it has been previously."

Rekha Iyer, a finance planner and educator based in the San Francisco Bay Area, says financial anxiety cuts across her clients at all socioeconomic levels, but for different reasons. People on the lower end are worried about rent pressure, caregiving costs, and irregular income streams. Those on the higher end are "asset rich but cash poor," meaning they may have a lot of money in their homes or in stocks, but it's not liquid. Layoffs and the threat of AI have high-income "dual tech" families, where both income-earners work in tech, on edge. They tend to have higher lifestyle costs — big mortgages, private-school tuition — that require a lot of money to keep up. "Even if one of them loses the job, then their whole living situation gets threatened," she says.

Unpredictability makes every move feel like the wrong answer. Should I buy a car now to avoid the tariffs, or wait until prices drop? But then again, what if they never do? Do I take the leap of starting that side hustle, or do I worry it'll take away too much from my much-needed 9-5? Do I up my retirement contributions, or do I YOLO my savings away because who knows what retirement will look like if I ever get there? These types of conundrums are bad for the individual but also bad for the economy — consumers are the country's economic engine, and a daily financial guesswork is not the best way to keep it humming.

"When people are uncertain about one thing, they tend to be uncertain about a lot of things," Collins says.

Haley Brown, a 23-year-old communications professional in New York, knows this is when she should be building long-term financial habits around savings and investing, but the economy feels like it's changing so fast that it's hard to keep up. Rent is unpredictable, and basic budgeting is confounding. In the era of endless internet content and social media, she has no idea where to look for advice.

"Every headline is telling me something different: double down on tech, avoid it completely, sit in cash, or ignore everything and just stay the course," she says. Are we in an AI bubble? Or is AI the innovation that will shape everything, and she's missing out by not investing in it heavily? "I see a lot of financial advice on TikTok, which, how much do I trust this independent on TikTok? But also, the TikTok is quite convincing."

Alexis Goldstein, 44, is still technically a CFPB employee due to an ongoing court battle over the agency's future amid the Trump administration's efforts to shut down the agency. However, she's been fired and unfired twice this year. Some of her colleagues have left amid the turmoil, but she's determined to stick around, even if it means finding out, day by day, whether she still has a job.

"There's a core of us that want to turn the lights off if we go down with this ship, because we believe in the mission," says Goldstein, speaking with me in her capacity as a CFPB union member.

The avenues for people's lives to go financially awry can seem ever-expanding. The cause could be a health crisis or a layoff, but it could also be a natural disaster, or a policy decision from the federal government that makes healthcare and food harder to access overnight. And in the background, many people are still struggling with the basics. Case in point: "Monthly bills" was the second-fastest-growing category for GoFundMe fundraisers in 2025.

Rachel Schneider, the founder and CEO of Canary, which helps companies distribute emergency relief to employees, tells me her company has seen an uptick in grant applications from people impacted by food stamp disruptions and facing forced relocations, meaning they're losing housing.

"A lot of people are in the economy working but not having enough money to be financially secure," she says, adding that it's "shocking" the extent to which they see food insecurity among working people in their grant applications. "Emergency grants are a crucial palliative activity," she says of the service her company provides, "but we don't solve the structural problem."

In this day and age, it's almost hard not to be an economic worrywart. Millions of Americans say they'd have a hard time taking on a surprise expense. Credit card debt is near record highs. Everything's expensive. The labor market seems like it has to give one way or another. This level of volatility is bad for business, and it's bad for people.

Emily Stewart is a senior correspondent at Business Insider, writing about business and the economy.