U.S. consumer sentiment rises back above the 50-point mark

Washington, DC, August 25, 2022 – Americans’ economic sentiment saw an uptick this week, as the Ipsos-Forbes Advisor U.S. Consumer Confidence Tracker shows a gain in its main index of 2.5 points from two weeks ago. This marks the first time the index is above 50-point mark since late May; the 10-week lull was the longest the index has been below this mark since summer 2020.

The increased optimism this week follows the enactment of the Inflation Reduction Act, the better than expected July CPI figures, and a historic daily decline in gas prices.

The Current, Investment, and Jobs sub-indices all showed gains of more than 1.5 points this week. Americans’ purchasing confidence and sense of job security also saw significant increases this reading.

Despite a more optimistic outlook, sentiment continues to differ widely by demographic groups. Democrats, those earning more than $100K, Americans ages 18-34, and those with a college degree continue to show scores significantly higher than the total population. In contrast, Republicans, the unemployed, and rural Americans have significantly lower index scores.

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. Reading at 52.1, the latest Overall Consumer Confidence index is up 2.5 points from two weeks ago.

• The Overall Confidence Index is currently 1.4 points below the pandemic average and 8 points below where it stood in early March 2020 prior to the first lockdowns (60.1). The index now sits just 0.8 point lower than its 20-year historical average.

2. The Expectations sub-index is up 0.7 point from two weeks ago. While the index shows some stability after weeks of volatility, it continues to sit below its pandemic and historical averages. Lastly, the index sits below the 60-point mark for the ninth consecutive reading, a threshold it never crossed in 2021.

3. The Current (+4.1 points) and Investment (+3.7 points) sub-indices made significant gains this week.

•  The Current Index and Investment Index scores continue to remain lower than they were pre-pandemic, now by 11.6 points and 10.7 points, respectively. However, the Current Index now sits around 3 points lower than both its pandemic and 20-year historical averages, while the Investment Index is around 4 points lower than these respective averages.

4. The Jobs sub-index, up 1.7 points, returns to levels seen for much of March and April. It remains relatively strong, exceeding its pandemic average by 6.5 points and its historical average by 7.1 points. The index now sits around three 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 50%, up 5 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 23%, down 1 point from two weeks ago.
• In addition, 40% 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 3 points from two weeks ago.

5. As inflation continues to rise, around half of Americans now report borrowing, withdrawing, and saving/investing money as much as usual. Although, Americans who report a change of behavior are exercising caution. Illustrated in the graphic below, the share that report doing things like spending money and investing/saving less often than usual outweighs the sharing doing each of these activities more often than usual. In fact, the amount that draw from their savings less than usual now outnumbers those who do so more than usual. This comes after two consecutive months where the opposite was true.

6. The most notable change versus four weeks ago is an increase in the percentage of those saying they are now spending money less than usual (35%, up 6 points since late July and reaching its highest point since tracking started in November 2021).

7. Purchasing confidence sees significant gains this week, with the amount comfortable making other household purchases rising above 40% for the first time since early June.

• 37% say they are more comfortable making major household purchases compared to six months ago, up 3 points from two weeks ago.

• 41% say they are more comfortable making other household purchases compared to six months ago, up 5 points from two weeks ago.

Questions

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

1. 1. Now, thinking about our economic situation, how would you describe the current economic situation in the 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:

Q. 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 August 22 – 23, 2022 with a sample of 924 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 2019 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, education, and party identification. Party ID benchmarks are from recent ABC News/Washington Post telephone polls.    

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=924, 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]

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