SAN FRANCISCO, Calif.-The Money Anxiety Index, which measures the level of consumers' financial worry and stress based on economic indicators, rose to 91.3 in July-an increase of 0.5 from last month, and 2.2 over April, when the index started trending upwards after ten months of improvement.
The authors said the results could indicate a second recession is coming. According to MoneyAnxiety.com, consumers are reacting to higher financial anxiety by halting spending, which makes up over 70% of the U.S. economy. "The last time personal consumption expenditures decreased was in the beginning of the last recession in 2008, when consumers halted and decreased their spending until the end of 2009," said MoneyAnxiety.com.
"The challenge with the U.S. economy goes beyond low consumer confidence-it has been elevated to the level of financial anxiety" said Dan Geller, chief research officer at Money Anxiety Index. "Confidence can be restored with promises of future improvement, as was the case in many past economic slow downs. However, financial anxiety is much deeper and harder to reverse because it is rooted in peoples' instinct to hoard in times of economic uncertainty."
For info: www.moneyanxiety.com.