Synovate research study finds few Americans feel the economy is improving despite Wall Street gains
CHICAGO - The Dow Jones may be slowly rising but Americans are still not feeling optimistic about their personal financial situations. Just before the stock market hit its latest low in March 2009, the Synovate Consumer Financial Sentiment Index (FSI), which measures the balance and magnitude of positive and negative consumer feelings about their personal financial situations, stood at -56 (signalling that a significant and larger portion of consumers feel they are worse off than better off compared to a year ago). After hitting a low of -85 in July (with the Dow up 38%), the FSI has “improved” as of March 2010 to -64. Still, about two and a half times as many people are feeling worse off than better off compared to one year ago. Only 16% of Americans feel the economy is improving, and many still believe that things will get worse before they get better.
To better understand financial attitudes and behavior among American consumers, Synovate recently surveyed approximately 1,000 men and women ages 18+ about their feelings towards the current state of the economy and their own economic situation.
Improved Economy, Not Improved Optimism
With the FSI still in negative territory, Claire Braverman, Senior Vice President of Synovate’s Financial Services group, notes that people still feel their personal financial situation has gotten worse regardless of overall economic improvement. “Clearly the typical consumer is not persuaded by the positive stock market performance and the stream of ’cautiously optimistic’ economic headlines of recent months,” says Braverman. “We have to feel the impact of the improvement personally before we believe the economy is really better overall.”
Interestingly, younger adults, especially those 18-34, seem to put more emphasis on the hopeful news trend. While they are more negative about their personal financial situation compared to their peers, they are much more optimistic than older Americans about the economy improving.
Living in Fear: Rainy Day Funds are Low
Not having enough money saved for emergencies is the top financial fear felt by 57% of people overall. But there is a clear gender difference as more women (61%) than men (53%) admit they experience this particular anxiety. And, despite the extraordinary levels of consumer debt in the midst of the recession, only a small fraction of Americans (5.5%) have sought professional guidance on debt management.
With this ubiquitous concern, the momentum in consumer spending remains negative. Excluding those who plan to spend about the same as they did a year ago, the number of people planning to spend less well outnumber those who plan to spend more across every spending category measured except for gasoline (no doubt reflecting expectations of rising prices). The toughest categories include health and beauty, dining out and apparel, with at least twice as many consumers planning to spend less versus more in these areas. In contrast, only 22% more people are cost cutters versus spenders in major exterior home or property improvements, and only 25% more people are planning to spend less in minor interior home improvements and decorating.
About the Synovate Consumer Financial Sentiment Barometer
Synovate’s Consumer Financial Sentiment Barometer is periodically conducted among a nationally representative sample of 1,000 adults in the US using Synovate’s online e-Nation panel to gauge how people feel about their personal financial situation as well as the economy overall. The Financial Sentiment Index (FSI) takes into account the net difference and magnitude of the percentage of consumers who feel financially better or worse off now compared to one year ago.
Synovate, the market research arm of Aegis Group plc, generates consumer insights that drive competitive marketing solutions. The network provides clients with cohesive global support and a comprehensive suite of research solutions. Synovate employs over 6,000 employees across 62 countries.
For more information on Synovate visit www.synovate.com.
This news content was configured by WebWire editorial staff. Linking is permitted.
News Release Distribution and Press Release Distribution Services Provided by WebWire.