Synovate's Latest Financial Sentiment Barometer: U.S. women feeling more positive while minorities and unemployed are above average in optimism about their future
21 July 2010
CHICAGO — While more Americans remain unhappy about the changes in their personal financial situations over the past year compared to the number that feels better, the outlook is improving for some, and certain groups are feeling surprisingly optimistic, according to global market research firm Synovate.
According to Synovate's latest U.S. Consumer Financial Sentiment Index (FSI), a periodic survey of Americans' financial attitudes and behaviors, the overall sentiment stands at -52, an improvement of 12 points from the last FSI of -64 in March 2010. This marks the second straight improvement and is the best mark since the Index began last year. However, it still remains in negative territory with over one and half times as many consumers feeling they are worse off than better off now compared to a year ago.
The Synovate U.S. Consumer Financial Sentiment Index is a measure of consumer financial momentum. Values will typically range from +100 to -100 (more extreme values are mathematically possible but highly unlikely) and zero is neutral. The Index is calculated by comparing the proportion of people who feel better off to the proportion who feel worse off, and factoring in the overall size of the positive or negative proportion. The proportion of people who feel their personal financial situation is "about the same" compared to one year ago are excluded since by definition they do not contribute to momentum.
Some seeing the brighter side
When looking at the Synovate U.S. Consumer Financial Sentiment Index by sub-groups, a few bright spots emerge. Women are considerably less worried than they were three months ago, and the percentage of women who feel better off now has nearly doubled, from 12% to 20%. Their overall FSI is up 18 points from -76 to -58.
Additionally, people who are married and those without children in the home are significantly less worried about their financial situation than they were three months ago. The biggest swing in consumer financial sentiment over the past three months occurred among higher income households with those earning $75,000 a year or more going from an index of -39 (in March 2010) to +31 now.
Americans 55 years old and above showed the biggest improvement among all age groups. Their FSI improved 21 points, from -78 to -57, near the overall average.
Claire Braverman, Senior Vice President of Synovate's Financial Services group, explains: "What we see happening is that as the economy ekes out improvements, people with lower amounts of financial risk are starting to get their heads above water, or at least they feel closer to that point. So married couples (where financial obligations are often shared), those without the additional financial requirements of raising children, and those with higher incomes are gaining some confidence that things are going to be okay. But people with high financial burdens and risk still feel very much 'under water'. Time is their enemy and they know it."
Looking ahead
Despite the fact most people surveyed do not feel better off than they were last year, some optimism about the future remains. Overall, 41% of people think their finances will get better in the coming year compared to 18% who think their situation will get worse. The pessimism is higher among those 55 and older as well as those with annual household incomes under $50,000. Surprisingly, despite continued high unemployment in the U.S., people who are currently out of work remain more optimistic (45%) than pessimistic (21%) about the future of their finances. Demographically, optimism is also considerably higher among minorities. Over half (54%) of non-whites think their finances will get better over the next year but only 38% of whites think that will be true for them.
About the survey
This Consumer Financial Sentiment Index was conducted online in the U.S. from June 18 to 22, 2010 with 1,000 U.S. adults (aged 18+) by Synovate eNation. Respondents for this survey were selected via a systematic random sample from among those who have agreed to participate in Synovate Panel surveys. The Synovate online panel is composed of almost one million U.S. adults who have been recruited to regularly participate in Synovate?s online surveys. Data were weighted by age, income, region, race/ethnicity and gender to reflect population proportions. The respondents were asked the following questions:
- Which statement best reflects your attitude toward your own economic situation? (Select one.)
I am much better off financially than a year ago
I am somewhat better off than a year ago
My financial situation is about the same as a year ago
I am somewhat worse off than a year ago
I am much worse off financially than a year ago - Which statement best reflects your expectations of the future of your economic situation? Would you say? (Select one.)
I think my personal financial situation will probably get better over the next year
I think my personal financial situation will probably get worse over the next year
I think my personal financial situation will probably be about the same a year from now
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