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Measuring the financial health of the nation is key to understanding the current state of the consumer and predicting how they will react in the months ahead. The CivicScience Consumer Financial Health Index (CFHI) has a pulse on how U.S. consumers expect their personal financial situation to change in the next six months.
Last month, consumer financial outlook declined steadily each week, repeating the pattern seen from April to May. The latest reading shows that weekly financial outlook ended the month at a low of 63.0%, a lower average than this time last year (63.6%).
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As a monthly average, consumer financial health declined in June to 63.2%, losing 0.4 points from the previous month. That represents the fourth consecutive month of losses.
Consumers are clearly feeling increasingly pessimistic about their finances for the months ahead. What’s driving the decline? A look at the individual markers behind the collective score indicates that consumers continue to feel worse about the short-term (6-month) outlook of their savings. Savings expectations fell an entire point from May, the lowest monthly average in the last eight months.
Debt outlook also took a turn for the worse recently, while income and investing outlook fell as well. The only outlier is credit score – consumers are more likely to expect their credit to stay the same or improve rather than get worse over the next six months.
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Is the heated political climate in the wake of the 2024 election driving down financial outlook? New findings from the CivicScience Election Mindset Tracker indicate that financial health declined among people of all political groups – Democrats, Republicans, and Independents alike. However, the inverse is true for economic outlook. Recent numbers show steadily improving economic sentiment heading into the July 4 weekend among all political groups, driven by increased confidence in the U.S. economy.
As we transition into the third quarter, the CFHI can provide key insights into shifts in consumer financial outlook and how those are likely to impact the shopping season, including back-to-school and holiday spending.
Learn more about the CFHI here.
