Americans brace themselves for higher prices and interest rates

Nevertheless, U.S. consumer confidence remains stable as COVID cases fall and market rallies

The author(s)

  • Nicolas Boyon Senior Vice President, US, Public Affairs
  • Catherine Morris Data Journalist, US, Public Affairs
  • Johnny Sawyer Research Manager, US, Public Affairs
  • Hailey Foster Research Analyst, Public Affairs
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Washington, DC, March 25, 2022 – Americans’ economic sentiment is up 1 point from two weeks ago to read at 53.5 in this week’s Ipsos-Forbes Advisor U.S. Consumer Confidence Tracker. This comes as the Expectations and Investment sub-indices rebound slightly, while the Jobs and Current sub-indices hold steady, reflecting a mix of positive and negative signals domestically and overseas.

While the ongoing conflict in Ukraine continues to put pressure on gas and fuel prices in the US, other stressors are lifting. Average daily COVID cases dropped by 25% over the past two weeks and the Dow Jones industrial average gained 2,000 points.

However, inflation continues to rise, along with concerns about the cost of daily life. Two in three (65%) Americans surveyed report they believe inflation will continue to go up over the next year, with three in five believing the same for mortgage interest rates (59%, up a whopping 13 percentage points from 10 weeks ago when last measured) and monthly bills (58%, up 8 points).

Demographics continue to mediate economic outlook. Overall, sentiment is highest among Democrats, city-dwellers, and the college-educated, while it is lowest among Independents, Republicans, those aged 55+, and rural Americans. Notably, the gap in sentiment between the most affluent Americans (those with a household income of $100,000 or more) and the least affluent ones (those with a household income of less than $50,000 is dwindling. While it averaged 14 points in 2021, it is down to less than 7 points now.


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.


Detailed Findings

1. Scoring at 53.5, the latest Overall Consumer Confidence index gains exactly 1 point from 52.5 two weeks ago.

  • The Overall Confidence Index is currently 0.3 points below the pandemic average, and 6.6 points below where it stood in early March 2020, prior to the first lockdowns (60.1)
Line graph showing overall U.S. consumer confidence which reads at 52.5 this week.

2. The Current, Investment, and Expectations sub-indices all remain not only below their pre-pandemic levels, but also below both their pandemic and 20-year historical averages. This week, the Current sub-index remains nearly unchanged from two weeks ago. However, the Expectations sub-index gains a meaningful 2.1 points and, in a slight reversal of the losses seen two weeks prior, the Investment sub-index gains 1.7 points.

3. The Jobs sentiment is flat while still holding well above (6.9 points) the pandemic average.

  • The proportion of Americans who say they are more confident in their job security now compared to 6 months ago is at 50%, down 4 points from two weeks ago.
  • 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 25%, down 2 points from two weeks ago.
  • In addition, 38% say it’s at least somewhat likely that they, a family member, or a personal acquaintance will lose their job in the next six months due to economic conditions, down 1 point from two weeks ago.
Table showing comparisons of each index current reading to various points in time or averages.

 

4. Americans generally expect their cost of living to increase over the next year, while just one in five expect their standard of living to improve.

Bar graph showing Americans levels of concern over various issues regarding the Russia-Ukraine conflict.

5. Comfort with making major and other household purchases relative to six months ago stops its decline and is largely consistent with the numbers seen two weeks ago on both measures.

  • 41% say they are more comfortable making major household purchases compared to six months ago, up 3 points from two weeks ago.
Line graph showing consumer comfort making major household purchases over time.
  • 44% say they are more comfortable making other household purchases compared to six months ago, up 2 points from two weeks ago.
Line graph showing consumer comfort making other household purchases over time.

 

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:

1. Over the next year, do you think each of the following will go up, go down, or stay about the same?

  • The amount you pay on monthly bills and other regular expenses
  • The rate of inflation
  • The taxes you pay
  • Mortgage interest rates
  • The number of unemployed people in this country
  • Your household income (e.g. wages, pensions, benefits, investments, etc.)
  • Your own standard of living
  • The total amount of your debt (e.g., mortgage, home equity/ auto/ student/ pers. loans, credit card debt, etc.)

About the Study                   

These findings are based on data from an Ipsos survey conducted March 21-22, 2022 with a sample of 904 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 4 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. For n=904, DEFF=1.5 and adjusted Confidence Interval=+/-5.5 percentage points.

Findings from March 2010 to early March 2020 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, US

Public Affairs

+1 202 420 2025

c[email protected]

About Ipsos

Ipsos is the world’s third largest Insights and Analytics company, present in 90 markets and employing more than 18,000 people.

Our passionately curious research professionals, analysts and scientists have built unique multi-specialist capabilities that provide true understanding and powerful insights into the actions, opinions and motivations of citizens, consumers, patients, customers or employees. We serve more than 5000 clients across the world with 75 business solutions.

Founded in France in 1975, Ipsos is listed on the Euronext Paris since July 1st, 1999. The company is part of the SBF 120 and the Mid-60 index and is eligible for the Deferred Settlement Service (SRD).

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The author(s)

  • Nicolas Boyon Senior Vice President, US, Public Affairs
  • Catherine Morris Data Journalist, US, Public Affairs
  • Johnny Sawyer Research Manager, US, Public Affairs
  • Hailey Foster Research Analyst, Public Affairs

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