Consumer financial anxiety hit a five-year low in January 2014, according to a preliminary Money Anxiety Index reading that shows a two basis point decrease from December.
The index stands at 79.1 so far in January, compared to its peak of 92.4 during the same month in 2013 and representing a five-year low from January 2009, when the index was at 78.9.
“The decline of 13.3 index points from the same month last year indicates that the improvement in consumers’ level of financial anxiety is a trend and not a monthly occurrence,” says researcher and analyst Dr. Dan Geller, who developed the Money Anxiety concept and index.
Chart credit: Money Anxiety Index
The improved financial outlook by consumers who are feeling less anxious about their finances translates to changed spending and saving habits, according to the index.
Similarly, consumer confidence in the U.S. reached a five-month high in December 2013, which at the time was an indicator Americans would keep spending into this year, according to the Thomson Reuters/University of Michigan index of consumer sentiment.
The index climbed from 75.1 in November to 82.5 in December 2013, bolstered by gains in employment, home values, and the stock market, all of which contribute to household wealth.
Written by Alyssa Gerace