U.S. consumer sentiment falls to lowest point in 18 months

Purchasing confidence tumbles as Americans expect inflation to continue rising

The author(s)

  • Nicolas Boyon Senior Vice President, US, Public Affairs
  • James Diamond Senior Research Manager, Public Affairs
  • Johnny Sawyer Senior Research Analyst
  • Charlie Rollason Senior Research Analyst
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Washington, DC, June 16, 2022 – Americans’ economic sentiment has plummeted, as Ipsos-Forbes Advisor U.S. Consumer Confidence Tracker indicates a decrease of 3.2 points from two weeks ago in the Overall Consumer Index – its steepest decline in nearly five months. At 49.8, the index now sits below the 50-point mark for the first time since December 2020.

The Expectations sub-index is down for the fifth consecutive two-week period and now sits at its lowest point since the beginning of the pandemic in March 2020. Of note, Americans’ job sentiment is also ebbing after hitting its highest point since early October 2021 last reading.

This week’s survey finds that purchasing confidence has decreased sharply as two in three Americans now feel less comfortable purchasing both big-ticket items and other household goods than they were several months ago. As inflation continues to hit historic highs, majorities of Americans expect inflation, mortgage payments, monthly expenses, and taxes to continue to rise.


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 49.1, the latest Overall Consumer Confidence index has decreased by 3.2 points from two weeks ago.

  • The Overall Confidence Index is currently 4.6 points below the pandemic average and 11 points below where it stood in early March 2020 prior to the first lockdowns (60.1). The index now sits nearly four points lower than its 20-year historical average.
Line graph showing overall U.S. consumer confidence which reads at 52.1 this week.

 

2. The Expectations Index is down 1.6 points from two weeks ago. It has shown a decline for five consecutive readings and is now sitting at its lowest point since the early days of the pandemic.

3. The Current and Investment sub-indices both dropped significantly from two weeks ago (-4.2 and -3.0, respectively). The Current index is now 15 points lower than it was pre-pandemic, while the Investment Index sits nearly 14 points below its pre-pandemic values. The Current index sits more than 6 points lower than both its pandemic and 20-year historical averages, while the Investment index is more than 7 points below these respective averages.

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

 

4. The Jobs sub-index fell 3.9 points from two weeks ago, all but erasing the gains made over the previous month. While the sub-index continues to remain relatively strong, exceeding both its pandemic and historical averages by more than 4 points, it now sits more than five 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 44%, down 7 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%, up 3 points from two weeks ago.
  • In addition, 39% 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. A majority of Americans continue to expect inflation to rise over the next year, along with mortgage interest rates, their monthly expenses, and their taxes. However, less than one-quarter now have the same expectation about their household income and their standard of living.

  • While wave-over-wave changes were not as significant this week, one notable change was a decrease in the percentage of Americans that believe their household income will go up (21%, down 3 points since May). With the S&P 500 declining into a bear market, and the Bureau of Labor Statistics’ announcement that May’s consumer price index increased at the highest rate in more than 40 years, this figure may continue to decline along with Americans’ job security and purchasing confidence. 
Bar graph showing Americans levels of concern over various issues regarding their spending habits

 

6. Comfort with making major purchases relative to six months ago plummets this week, and now just one in three are currently comfortable making both major and other household purchases.

  • 35% say they are more comfortable making major household purchases compared to six months ago, down 6 points from two weeks ago.
Line graph showing consumer comfort making major household purchases over time.
  • 35% say they are more comfortable making other household purchases compared to six months ago, down 7 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 question:

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

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

About the Study                   

These findings are based on data from an Ipsos survey conducted June 13 – 14, 2022 with a sample of 929 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 3.9 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=929, DEFF=1.5 and adjusted Confidence Interval=+/-5.4 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 Senior Research Analyst
  • Charlie Rollason Senior Research Analyst

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