Consumer stress levels are 15% higher this month than they were in January 2022, according to survey results released this month by WalletHub.
Some of the factors that may be contributing to financial stress are: employment opportunities, job security and real estate concerns.
According to the survey results, the share of consumers who feel new employment opportunities are “abundant” is more than 7% lower compared to last year. People’s confidence that they would have a job in the next six months also dropped 7% compared to 2022.
Late last year, social media giants Meta and Twitter announced significant layoffs. This month, Google and Microsoft each announced tens of thousands of layoffs as well.
While people appear to have low confidence in the job market, U.S. Bureau of Labor Statistics data released earlier this month showed a decrease in unemployment. Also, though high inflation and rising interest rates squeezed consumers in 2022, the BLS reported a slight decrease in the Consumer Price Index during December of last year.
In addition to concerns about the job market, some consumers surveyed for the WalletHub Economic Index were concerned about the housing market.
The index is a monthly survey that evaluates economic prospects based on 10 components of consumer sentiment. Each of these metrics had a less than positive response in the recent survey.
“Home-buying interest among consumers decreased slightly (-1.8%) during the past year,” said the personal finance website. Interest in buying a car also dropped by a little under 1%.
Indeed, recent research indicates that housing prices could soon drop dramatically. A report issued by Goldman Sachs indicates “a seismic crash like the 2008 housing collapse is expected to occur in Austin, Texas; Phoenix, Arizona; San Diego, California; and San Jose, California,” per WWJ Radio.
Overall, consumers surveyed by WalletHub felt 13% less confident about their financial outlook now than they did one year ago. According to the site, this is the second largest year-over-year drop during the past 12 months. There was also a 14% drop in financial optimism compared to last year.
“In January 2023, consumers’ optimism about their finances recorded a considerable decrease from the previous month, hitting the lowest value registered since December 2020,” said WalletHub.
Even though the consumer optimism is low, President Joe Biden said Thursday that there are things to be positive about as far as the U.S. economy is concerned.
“Economic growth is up, stronger than experts expected,” he said.