Ipsos-Reid CASH Index: Consumers Lose Faith in Economic Recovery

The Index of Consumer Attitudes and Spending by Household Consumers Do Not Trust Their Local Economy to Improve and Lose Confidence that They Can Save for Retirement or Education Needs

Ipsos-Reid CASH Index: Consumers Lose Faith in Economic Recovery

WASHINGTON, D.C - Consumer attitudes have tumbled since early June, driven south by concerns about the future of the local economy, negative feelings about one's own personal financial situation and by doubts about the ability to save and invest for retirement or a child's education. The Ipsos-Reid CASH Index--an index of Consumer Attitudes and Spending by Household--stands at 82.9, down 17.1 points from January 2002, when the index was set at 100.

This is the first release of the Ipsos-Reid CASH Index. Data for the index comprises results from surveys of consumers conducted twice a month since January. Results and index scores are compiled using rolling averages of two consecutive polls, based on a representative sample totaling 2,000 adults nationwide.

The Ipsos-Reid CASH Index comprises 10 questions, covering attitudes about the local economy now and in the future, personal finances now and in the future, comfort with making major purchases and other household purchases, confidence in job security and in the ability to save and invest for retirement or education, and job loss experience for self, friends and family in the recent past as well as job loss expectations for self, friends and family in the near future.

Three components of the Ipsos-Reid CASH Index explain the drop in the index to its current standing of 82.9.

  • Expectations about the future of the local economy are the largest source of doubts. Since January, the percentage of Americans who believe the economy in their local area will improve in the next six months has dropped from 41% in January to 30% today.

  • Ratings of current financial situations have been the second-largest factor contributing to the 17.1 point drop in the index since January, as adults have moved from 28% positive (rating their current financial situation a 6 or 7 on a 1-to-7 scale) and 23% negative (rating their current financial situation a 1, 2 or 3) in January, to 23% positive-25% negative today.

  • Attitudes have flipped on confidence in investments, from 43% more confident to 39% less confident in January to 40% more confident to 46% less confident today. That is the third largest factor contributing to the decline in the index.

Ipsos-Reid CASH Index (Ipsos-Reid Index of Consumer Attitudes and Spending by Household) Mid June - Mid July 2002

Changes Since January 2002

The margin of error for the questions on each rolling average of two consecutive surveys totaling 2000 adults is 177 2.2%.

    For more information on this release, please contact: Thomas Riehle President Ipsos-Reid US Public Affairs 202.463.7300 thomas.riehle@ipsospa.com

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