Dig Insights & Benzinga have been tracking the attitudes and emotions of the general public towards the economy with our Economic Sentiment Tracker. Completing the third wave of research in March 2023, with previous waves in May and November 2022, the tracker is a useful tool for companies looking to take a pulse on economic sentiment for their own business needs.
Reviewing the data from the March 2023 wave, we found five distinct themes:
- Declining Consumer Optimism and Increasing Disapproval
- Pessimistic Economic Outlook
- Inflation and Financial Anxieties
- Deteriorating Personal Financial Situation
- Adaptation and Cost-Saving Measures
The key statistics
- Half of Americans think the economy is in bad shape, with only a third believing it will improve in the next 6 months.
- Almost half (49%) of Americans are worried about job security.
- Most Americans are using cost-saving measures to help reduce their bills, with 79% using coupons and promotions on groceries, and 67% are cutting back on fresh food like meat and vegetables.
- 4-in-10 say they accumulate more debt trying to keep up with bills.
Declining Consumer Optimism and Increasing Disapproval
Most Americans pay attention to news about the economy and, for many, optimism is giving way to feelings of disapproval and sadness. Only 6% of Americans do not pay attention to news about the economy at all.
Q. How much do you pay attention to news about economy?
- Pay no attention at all
- Pay very little attention
- Pay some attention
- Pay a lot of attention
While most Americans pay attention to economic news, only one in ten respondents indicated that they felt hopeful about their own financial situation. Furthermore, 18% of respondents indicated that they feel sad about their personal financial situation; up from 15% in November 2022.
Pessimistic Economic Outlook
Half of Americans think the economy is in bad shape. With only a third believing it will improve in the next 6 months, with just as many thinking it will get worse.
Positive perceptions of the economic landscape in the US haven’t changed since November 2022, with 28% of Americans considering the economy to be in a very/somewhat good shape. Negative perception of the economy dropped slightly, with 50% of respondents believing it was in a very/somewhat bad state, down from 54% of respondents in November 2022.
Q. In your opinion, how would you describe the economy overall?
- Very/somewhat bad
- Very/somewhat good
The slight decrease in negative perception continues when thinking about economic recovery, with 34% of Americans sharing that they expect the economy to be much/somewhat worse in the next six months; down two points from November 2022.
Q. Six months from now, do you think the economy will be compared to today?
- Much/somewhat worse
- Much/somewhat better
Inflation and Financial Anxieties
The worry about personal financial situations reflects general anxiety around inflation, recession, everyday living costs, and job security. 84% of Americans are extremely/somewhat worried about inflation on things like food and utilities, and 81% are extremely/somewhat worried that the US may enter an economic recession.
Q. How worried are you about the following issues affecting you personally in the next 12 months? (% Extremely/somewhat worried)
- Wave 2
- Wave 3
Almost half of the respondents (49%) were extremely/somewhat worried about their job security in a landscape of layoffs and closing businesses, with only 38% of people confident in their ability to find a new job quickly that matches their current income level.
Q. How much do you agree or disagree with this statement: “I could quickly find a new job at my current income”?
- % Very/somewhat agree
Deteriorating Personal Financial Situation
The pessimistic economic outlook extends beyond the wider economy and into personal finances. The percentage of Americans who feel that their own financial situation was somewhat/very good dropped almost 7 points since November 2022. Overall, a third of Americans (33%) thought their personal financial situation was somewhat or very bad, up almost five points from November 2022.
Q. How would you describe your personal financial situation?
- Very/somewhat bad
- Very/somewhat good
When asked about paying bills, most respondents shared that they were able to pay bills currently (73%, down three points since November 2022) however, 4 in 10 Americans say paying bills is actually causing them to rack up debt. Only 43% of people shared that they are not accumulating debt, down from 49% when we first asked in May 2022.
Q. How much do you agree or disagree with this statement: “I am accumulating more debt”?
- Very/somewhat agree
- Very/somewhat disagree
If an extra $500 suddenly appeared in their lives, only 1-in-10 Americans would use their windfall for something fun, with 4-in-10 sharing that they would put the unexpected money towards debts or bills.
Q. If an extra $500 suddenly appeared in your pocket, would you…?
- Would spend an extra $500 on… %
Adaptation and Cost-Saving Measures
The worries that Americans face around their personal financial situation are presenting themselves in spending habits. When asked how they are adapting to increasing costs, the majority of respondents shared that they are already taking cost-saving measures for everyday purchases.
When it comes to grocery shopping, 79% of Americans are already using coupons and promotions, and 74% of people are buying less expensive or store brands to reduce their shopping bill. As for eating out, 76% of respondents are trying new recipes at home instead of going out to restaurants. Meal kits are also being used as a substitute for restaurant dinners for 60% of those we surveyed.
Q. We are going to show you some things that people are doing. If you see something you are currently doing, swipe right or click the ✓. If see something you are not currently doing, swipe left or click the ‘X’.
- % currently doing
Cancelling subscriptions is a popular way for consumers to save money, with 56% of Americans cancelling their entertainment subscriptions to places like Spotify, Netflix, and Amazon Prime Video. If forced to pick one subscription to keep and the rest to stop, 29% of people chose to keep their Netflix subscription, and only 7% chose to keep Disney+.
Q.If you could have just one streaming service, which would it be?
- Most preferred streaming service (%)
So what are the key learnings?
The current economic environment has led Americans to perceive an uncertain and pessimistic future. Personal financial situations are deteriorating, causing increased anxiety over inflation, recession, and job security. To adapt, consumers are employing various cost-saving measures, such as using coupons, cooking at home, and canceling subscriptions.
Read the full US report, or browse the Canadian findings:
- Economic Sentiment: Where Has 2022 Taken Consumer Perceptions? (US)
- Economic Sentiment: Where Has 2022 Taken Consumer Perceptions? (US + Canada)
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