NEW YORK — Americans grew slightly more pessimistic about the economy this month, according to a closely watched survey released on Tuesday, as worries about housing, insurance and other fixed costs outweighed reassurance from a steady job market.
The Consumer Outlook Index, published monthly by the nonprofit Brookfield Economic Board, fell to 98.4 this month from a revised 101.2 the month before. Economists had expected a reading of about 100. A reading above 100 generally signals more optimism than pessimism.
Present good, future uncertain
The survey’s gauge of current conditions held up well, with more respondents describing jobs as “plentiful” than “hard to get.” But its measure of expectations for the next six months fell to its lowest level since spring, as fewer people said they expect business conditions or their own incomes to improve.
People feel secure in their jobs, but they look at their monthly bills and see rent, home insurance and car payments that keep climbing. That squeeze is showing up in how they think about the year ahead.
Dana Whitaker, senior director of economic research, Brookfield Economic Board
Whitaker said write-in responses frequently mentioned home insurance premiums, which have risen sharply in many states in recent years, along with property taxes and the cost of repairs. Concerns about grocery prices, which dominated responses two years ago, have faded somewhat.
- 98.4: this month’s index reading, down from 101.2
- 36 percent: share saying jobs are “plentiful”
- 16 percent: share saying jobs are “hard to get”
- 5.1 percent: average expected inflation over the next 12 months
Plans to spend
The survey also asks about purchasing plans. Fewer households said they intend to buy a home or a new car in the next six months, while plans to buy major appliances were steady. Vacation plans dipped slightly but remained higher than before the pandemic.
Confidence varied by age and income. Respondents under 35 were the most optimistic about their own prospects, while those 55 and older were the most pessimistic, a pattern Whitaker linked to retirees’ sensitivity to rising housing costs. Households earning more than $125,000 a year reported higher confidence than those earning less than $50,000.
Economists cautioned against reading too much into a single month. Confidence surveys can be swayed by headlines and stock market moves, and they do not always predict how much people actually spend.
“What people say and what they do are often different,” said Marcus Lindgren, an economist at Hollis & Reed Research. “We have had several years where confidence looked gloomy and spending kept rising anyway. The best guide is still jobs and wages, and those remain solid.” Retailers will be watching closely as the holiday shopping season approaches. A separate survey from a retail trade group projects modest growth in holiday sales, with shoppers focused on deals.
In Tampa, Fla., Angela Ruiz, a dental hygienist, said her family is planning a smaller holiday this year after their home insurance bill rose by nearly $1,400. “We both have good jobs, and we’re grateful for that,” she said. “But every time I open the mail there’s another increase. We’re just being careful.”
The board’s next monthly survey will be released in about four weeks. Whitaker said she will be watching whether the recent dip in gasoline prices and the approach of the holidays lift spirits, or whether worries about housing costs continue to dominate. “Confidence tends to follow the things people pay for every month,” she said. “Right now those bills are the story.”
