Steep decline in consumer confidence on eve of Biden’s inauguration

Washington, DC, January 21, 2021 — As the labor market continues to strain under the effects of the coronavirus pandemic, overall consumer sentiment indexes at 50.8 in this week’s Ipsos-Forbes Advisor U.S. Consumer Confidence Tracker, a steep decline of 3.7 points from the week prior.

Consumer sentiment fell across all sub-indices as another 900,000 Americans filed jobless claims last week, a sign of ongoing stress on businesses and workers. Against this backdrop, Americans are largely in agreement about what federal initiatives would have the most significant impact on their financial situation.

Almost 9 in 10 Americans (86%) say that a new federal stimulus check would have an impact on their finances, including 45% who expect it to have a “major impact”. More expect their financial situation to be positively affected by a new stimulus than by the lifting of COVID restrictions (80%) or getting vaccinated against COVID (74%).

Fewer (69%) say that additional federal support for the unemployed would impact their finances at all, including 35% who say it would in a major way. Part-time and unemployed Americans are especially likely to say that it would have a major impact on their finances (42% each), compared to full-time workers (32%) and retirees (26%).

Several demographic groups that had previously shown strong consumer sentiment saw a significant decline since last week. These include retirees (-7.6 points) and Americans ages 55 and older (-7.4 points). The groups seeing the most drastic decline from last week include Midwesterners (-8.3 points) and Americans earning between $50k and $100k (-8.1 points).

Consumer sentiment fell among Republicans as the nation prepared for the inauguration of Joe Biden. Sentiment among Republicans is down 6.2 points (51.1) from last week, while Democrats and Independents hold relatively steady at 53.4 and 45.7 respectively. Republican readings are down across all sub-indices: Current Index (-7.7 points), Investment Index (-8.3), Expectations Index (-4.1), and Jobs Index (-4.7).

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Read the full story from Forbes Advisor here.

Learn more about the Ipsos Global Consumer Confidence Index and sub-indices via the interactive portal, Ipsos Consolidated Economic Indicators (IpsosGlobalIndicators.com) including graphic comparisons, trended data and all the questions on which they are based.

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Detailed Findings

1. Scoring at 50.8, the latest overall Consumer Confidence fell 3.7 points from last week.

• The Confidence index is currently 1 point above the pandemic average and 9.3 points lower than where it stood in early March (60.1).

2. The Current, Expectations, and Investment sub-indices all saw significant declines, ranging from 3.7 to 5.1 points. Their readings now sit at 42.3, 61.6, and 46.8 respectively.

• Despite this drop, the Current and Investment sub-indices both remain 2.2 points above their pandemic average, while Expectations has fallen 1.6 points below it.

3. Jobs confidence furthered the decline initiated last week, falling another 1.9 points.

• The proportion of Americans reporting they, a family member, or a personal acquaintance lost their job in the past six months due to economic conditions is at 41%, down 2 points from last week.
• In addition, 51% say it’s likely they, a family member, or a personal acquaintance will lose their job in the next six months due to economic conditions, up 5 points from last week.

4. Americans are slightly less optimistic about a quick economic recovery – 52% agree that the economy will pick up quickly once pandemic restrictions are lifted, down 2 points from last week.

5. Americans are divided on the question of whether to allow businesses to resume activity even if the virus is still not fully contained. This week, 47% agree that the economy should be allowed to pick up again, down 3 points from last week.

6. Purchasing confidence for both major items and other household items is less robust this week.

• Only 39% say they are more comfortable making a major purchase like a home or a car now than they were six months ago, down 5 points from last week.

• Compared to six months ago, 43% say they are more comfortable making other household purchases than they were six months ago, down 6 points from last week.

7. Nearly nine in ten (86%) of Americans think individual stimulus checks will have at least some impact on their financial situation.

• More believe that a new stimulus check from the Federal government would impact their finances when compared to lifting COVID restrictions (80%), COVID vaccination (74%), or new/additional unemployment support from the Federal government (69%)
• Forty-five percent say a stimulus check would have a “major impact”, while 43% say the same for the lifting of COVID restrictions and receiving the COVID vaccination. Just 35% believe new/additional Federal unemployment support would make a major impact on their financial situation.

Questions

The data used for the Consumer Confidence index and sub-indices is based on the following questions:

1. Now, thinking about our economic situation, how would you describe the current economic situation in US? Is it… very good, somewhat good, somewhat bad or very bad?
2. Rate the current state of the economy in your local area using a scale from 1 to 7, where 7 means a very strong economy today and 1 means a very weak economy.
3. Looking ahead six months from now, do you expect the economy in your local area to be much stronger, somewhat stronger, about the same, somewhat weaker, or much weaker than it is now?
4. Rate your current financial situation, using a scale from 1 to 7, where 7 means your personal financial situation is very strong today and 1 means it is very weak
5. Looking ahead six months from now, do you expect your personal financial situation to be much stronger, somewhat stronger, about the same, somewhat weaker, or much weaker than it is now?
6. Compared to 6 months ago, are you NOW more or less comfortable making a major purchase, like a home or car?
7. Compared to 6 months ago, are you NOW more or less comfortable making other household purchases?
8. Compared to 6 months ago, are you NOW more or less confident about job security for yourself, your family and other people you know personally?
9. Compared to 6 months ago, are you NOW more or less confident of your ability to invest in the future, including your ability to save money for your retirement or your children’s education?
10. Thinking of the last 6 months, have you, someone in your family or someone else you know personally lost their job as a result of economic conditions?
11. Now look ahead at the next six months. How likely is it that you, someone in your family or someone else you know personally will lose their job in the next six months as a result of economic conditions?

Additional questions

Q. To what extent do you agree with the each of the following

• The economy will recover quickly once the restrictions to control the coronavirus pandemic are relaxed.
• We should restart the economy and allow businesses to open even if the virus is still not fully contained.

Q. How much of an impact do you think the following will have on your financial situation if/when they happen?

• Getting a new stimulus check from the federal government
• Lifting restrictions to control COVID-19
• Being able to be vaccinated against COVID-19
• New or additional federal government support for the unemployed

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About the Study

These findings are based on data from an Ipsos survey conducted January 19-20, 2021 with a sample of 932 adults aged 18-74 from the continental U.S., Alaska, and Hawaii who were interviewed online in English.

The sample was randomly drawn from Ipsos’ online panel, partner online panel sources, and “river” sampling and does not rely on a population frame in the traditional sense. Ipsos uses fixed sample targets, unique to each study, in drawing a sample. After a sample has been obtained from the Ipsos panel, Ipsos calibrates respondent characteristics to be representative of the U.S. Population using standard procedures such as raking-ratio adjustments. The source of these population targets is U.S. Census 2016 American Community Survey data. The sample drawn for this study reflects fixed sample targets on demographics. Post-hoc weights were made to the population characteristics on gender, age, race/ethnicity, region, and education.

Statistical margins of error are not applicable to online non-probability polls. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error and measurement error. Where figures do not sum to 100, this is due to the effects of rounding. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll has a credibility interval of plus or minus 3.7 percentage points for all respondents. Ipsos calculates a design effect (DEFF) for each study based on the variation of the weights, following the formula of Kish (1965). This study had a credibility interval adjusted for design effect of the following (n=932, DEFF=1.5, adjusted Confidence Interval=+/-5.2 percentage points).

Findings from previous time periods going back to March 2011 are based on data from Refinitiv /Ipsos’ Primary Consumer Sentiment Index (PCSI) collected in a monthly survey on Ipsos’ Global Advisor online survey platform with the same questions. For the PCSI survey, Ipsos interviews a total of 1,000+ U.S. adults aged 18-74. The Refinitiv/Ipsos Primary Consumer Sentiment Index (PCSI), ongoing since 2010, is a monthly survey of consumer attitudes on the current and future state of local economies, personal finance situations, savings and confidence to make large investments. The PCSI metrics reported each month consist of a “Primary Index” based on 10 questions available upon request and of several “sub-indices” each based on a subset of these 10 questions. Those sub-indices include a Current Index, an Expectations Index, an Investment Index and a Jobs Index.

Findings for January 2002- February 2011 are based on data from the RBC CASH Index, a monthly telephone survey of 1,000 U.S. adults aged 18 and older conducted by Ipsos with a margin of error of +/- 3.1 percentage points.

For more information on this news release, please contact:

Chris Jackson
Senior Vice President, U.S., Public Affairs
Ipsos
+1 202 420 2025
[email protected]

Kate Silverstein
Media Relations Specialist, U.S., Public Affairs
Ipsos
+1 718 755-8829
[email protected]

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