The WalletHub Economic Index decreased by around 13% between January 2022 and January 2023. This means consumers are about 13% less confident about their financial outlook now than they were at the same time last year.
The WalletHub Economic Index is a monthly survey that evaluates economic prospects based on 10 components of consumer sentiment. These components revolve around how people feel about their finances, purchasing plans and employment opportunities.
Main Findings
Change in WalletHub Economic Index: January 2023 vs. January 2022
| Economic Index | Change |
|---|---|
| Positive sentiment about finances now | -13.7% |
| Likelihood of making a big purchase in the next 6 months | -9.2% |
| Positive sentiment about current employment opportunities | -7.2% |
| Confidence in having a job in 6 months | -7.1% |
| Positive outlook on finances 6 months from now | -4.8% |
| Positive sentiment about credit score in the next 6 months | -4.0% |
| Likelihood of buying a home in the next 6 months | -1.8% |
| Positive sentiment about debt levels in the next 6 months | -0.9% |
| Likelihood of buying a car in the next 6 months | -0.6% |
| Stress level about money now | +14.7% |
| Overall WalletHub Economic Index | -12.6% |
Detailed Findings
- Year-over-year, consumers felt less confident about their financial outlook in January 2023, with the value of the overall index registered being around 13% lower than in January 2022.
Overall
- Plummeting financial optimism: In January 2023, consumers’ optimism about their finances recorded a considerable decrease from the previous month, hitting the lowest value registered since December 2020.
How do you feel about your finances right now?
Note: The higher the value, the more optimistic people feel about their finances.
- Rising stress: Consumers’ stress levels regarding money are considerably worse (+14.7%) in January 2023 compared to the same period last year.
How do you feel about money?
Note: The lower the value, the less stress people feel about money.
- Decline in optimism: In January 2023, consumers’ optimism about whether their finances will improve in the next six months is about 5% lower than it was last year.
How will your finances look 6 months from now?
Note: The higher the value, the more improvement people expect for their finances.
- Fewer new employment opportunities: The share of consumers who feel new employment opportunities are “abundant” is more than 7% lower in January 2023 compared to last year.
How would you describe current employment opportunities?
Note: The higher the value, the more abundant people think employment opportunities are.
- Weak sense of job security: People’s confidence in having a job in the next six months was weaker (-7.1%) in January 2023 compared to last year.
How confident are you that you will have a job in 6 months?
Note: The higher the value, the more confident people are they will have a job.
- Real estate declines: Home-buying interest among consumers decreased slightly (-1.8%) during the past year.
How likely are you to buy a home in the next 6 months?
Note: The higher the value, the more likely people are to buy a home.
- Steady interest in auto purchases: The share of consumers who expect to buy a car in the next six months is slightly lower (-0.6%) in January 2023 compared to last year.
How likely are you to buy a new car in the next 6 months?
Note: The higher the value, the more likely people are to buy a car.
- Large purchases are not a priority: In January 2023, consumers’ likelikood of making a large purchase in the next six months is more than 9% lower than it was last year.
How likely are you to make a large purchase within the next 6 months?
Note: The higher the value, the more likely people are to make a large purchase.
- More worry about debt: The share of consumers who expect to have less debt after the next six months is slightly lower (-0.9%) in January 2023 compared to last year.
Will you have more or less debt in 6 months?
Note: The higher the value, the more confident people are that they will reduce their debt.
- Credit score insecurity: The share of consumers who expect their credit score to increase in the next six months is 4% lower in January 2023 compared to last year.
Will your credit score be better or worse in 6 months?
Note: The higher the value, the more confident people are that they will increase their credit score.
Ask the Experts
In order to gain more insight into consumer attitudes during a difficult year, WalletHub turned to a panel of experts. Click on the pictures of the experts below to read their bios and responses to the following key questions:
- How have consumer spending habits changed during this last year?
- What tips do you have for consumers looking to improve their finances?
- Have the pandemic economic struggles encouraged Americans to become more financially savvy?
- When in the near future will it be a good time for consumers to start making large purchases?
- What will the post-pandemic economy and job market look like?
Ask the Experts
Adjunct Professor of Marketing, Olin Business School – Washington University
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Associate Professor of Marketing – Bentley University
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D.B.A. – Professor and Department Head, Department of Management & Marketing, Mike Cottrell College of Business – University of North Georgia
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Ph.D. – Dean and Professor – Ball State University Teachers College
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Faculty Economics – Dallas College
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Instructor of Business Communication, Marketing Department, Herberger Business School – St. Cloud State University
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Methodology
The WalletHub Economic Index is based on a nationally representative online survey that WalletHub conducts monthly. There has been a total of over 6,250 respondents between December 2020 and January 2023.
WalletHub Economic Index Questions
- How do you feel about your finances right now?
Pessimistic 1 2 3 4 5 Optimistic - How will your finances look 6 months from now?
Much Worse 1 2 3 4 5 Much Better - How do you feel about money?
Very Stressed 1 2 3 4 5 Not Stressed - How confident are you that you will have a job in 6 months?
Not confident 1 2 3 4 5 Very confident - How would you describe current employment opportunities?
Limited 1 2 3 4 5 Abundant - How likely are you to buy a home in the next 6 months?
Not at all likely 1 2 3 4 5 Very likely - How likely are you to buy a new car in the next 6 months?
Not at all likely 1 2 3 4 5 Very likely - How likely are you to make a large purchase within the next 6 months?
Not at all likely 1 2 3 4 5 Very likely - Will you have more or less debt in 6 months?
More debt 1 2 3 4 5 Less debt - Will your credit score be better or worse in 6 months?
Worse 1 2 3 4 5 Better