U.S. Consumer Investment and Expectations indices drop to lowest level in more than 10 years

Anxiety among young Americans and Democrats accelerates decline in overall consumer sentiment

The author(s)

  • Nicolas Boyon Senior Vice President, US, Public Affairs
  • James Diamond Senior Research Manager, Public Affairs
  • Johnny Sawyer Research Manager, US, Public Affairs
  • Charlie Rollason Senior Research Analyst
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Washington, DC, June 30, 2022 – – Americans’ economic sentiment continues its descent, as Ipsos-Forbes Advisor U.S. Consumer Confidence Tracker indicates a decrease of 2.2 points from two weeks ago and more than 9 points since February in the Overall Consumer Index. At 46.9, the index has fallen to its lowest point since July 2020.

The Expectations sub-index is down for the sixth consecutive two-week period, while the Investment sub-index is down for the fourth one. Both sub-indices have declined to their lowest levels in more than a decade. However, Americans’ job sentiment remains relatively high even though this week’s reading of the Jobs sub-index is the lowest since last October.

This week’s survey finds that purchasing confidence continues to decline, as seven in 10 Americans now feel less comfortable purchasing both big-ticket items and other household goods than they were several months ago.

The drop in Overall sentiment from two weeks ago is driven by two groups: Democrats and adults aged 18-34. On the heels of the Supreme Court’s decision to overturn Roe v. Wade, consumer confidence among both groups has fallen to its lowest point since late 2020. Americans with a household income of less than $50,000 have also contributed to the drop in overall sentiment, and similar to Democrats and younger Americans, their level of consumer confidence now sits at its lowest point since late 2020.


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 46.9, the latest Overall Consumer Confidence index has decreased by 2.2 points from two weeks ago.

  • The Overall Confidence Index is currently 6.8 points below the pandemic average and 13.2 points below where it stood in early March 2020 prior to the first lockdowns (60.1). The index now sits six points lower than its 20-year historical average.
Line graph showing overall U.S. consumer confidence which reads at 52.5 this week.

 

2. The Expectations Index is down 2.5 points from two weeks ago. It has shown a decline for six consecutive readings and is now sitting at its lowest point since July 2009.

3. The Current and Investment sub-indices both dropped significantly from two weeks ago (-3.0 and -3.4, respectively). The Current index sits at its lowest point since May 2020, while the Investment Index is at its lowest since October 2011.

The Current Index and Investment Index scores are now lower than they were pre-pandemic by 18 points and 17 points, respectively. The Current index sits nearly 10 points lower than both its pandemic and 20-year historical averages, while the Investment index is around 11 points lower than these respective averages.

Table showing comparisons of each index current reading to various points in time or averages.

 

4. The Jobs sub-index shows a smaller drop than other sub-indices, as it is down 0.9 points from two weeks ago. It continues to remain relatively strong, exceeding both its pandemic and historical averages by 3.5 and 4 points, respectively. However, it now sits more than six points below its pre-pandemic reading.

  • The proportion of Americans who say they are more confident in their job security now compared to six months ago is at 42%, down 2 points from two weeks ago and 9 points from four 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 24%, down 1 point from two weeks ago.
  • In addition, 42% 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, up 2 points from two weeks ago.

5. As inflation continues to rise, just half of Americans now report borrowing as much as usual, while less than half now report saving/investing money as much as usual. Americans are still exercising caution, as those who report a change are more likely to say they have been doing less of each as opposed to more of it – spending money (32% vs. 22%), investing or saving (42% vs. 11%), borrowing money or using credit (26% vs. 20%), or paying off debt less (25% vs. 9%).

However, those who draw from their savings more than usual now outnumber those who do so less than usual (26% vs 22%) for the first time since tracking for this question started in November 2021.

Bar graph showing Americans levels of concern over various issues regarding their spending habits

 

6. The most notable changes are an increase in the percentage of those saying they are now withdrawing money more than usual (26%, up 6 points since early June) and a decrease in the percentage of those who are borrowing money or using credit less than usual: (26%, down 7 points since early June).

Chart showing Americans levels of concern over various issues regarding their spending habits over time

 

7. Comfort with making major purchases relative to six months ago continues to decline, and now just three in ten are currently comfortable making both major and other household purchases.

  • 31% say they are more comfortable making major household purchases compared to six months down 4 points from two weeks ago and 9 points from four weeks ago.
Line graph showing consumer comfort making major household purchases over time.

 

  • 31% say they are more comfortable making other household purchases compared to six months ago, down 4 points from two weeks ago and 11 points from four 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. In the past few months, have you done each of the following more than, less than, or as much as you usually do?

  • Draw from your savings
  • Spend money
  • Invest or save money
  • Borrow money or use credit
  • Pay off your loans/credit

About the Study                   

These findings are based on data from an Ipsos survey conducted June 27 – 28, 2022 with a sample of 919 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 4.0 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=919, 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

[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.

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The author(s)

  • Nicolas Boyon Senior Vice President, US, Public Affairs
  • James Diamond Senior Research Manager, Public Affairs
  • Johnny Sawyer Research Manager, US, Public Affairs
  • Charlie Rollason Senior Research Analyst

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