Bankrate Measures Highest Level of Consumers' Financial Security in 17 Months, But Finds Continued Fears Regarding Stocks and Jobs
NEW YORK, April 23, 2012 /PRNewswire/ -- Bankrate.com's (NYSE: RATE) monthly Financial Security Index hit a new high of 99.9 in April 2012, surpassing the previous high-water mark of 98.5 that was last recorded in May 2011 (the polls began in Dec. 2010). Americans' attitudes regarding their net worth and overall financial situation also reached new highs this month. Sentiment regarding savings improved for a fifth consecutive month, and Americans' comfort level with debt is at its highest point since June 2011.
Despite these positive developments, Americans are still wary of investing in stocks. The poll found that 76% of Americans are not more inclined to invest in the stock market despite near record low savings rates, and merely 18% of Americans are more inclined to invest in stocks today. Another soft spot is job security: 22% of Americans reported less job security than one year ago versus 20% that reported better job security.
"Overall, there are several positives that can be taken from this month's report," said Greg McBride, CFA, Bankrate.com's senior financial analyst. "Americans are feeling better about the money they have in the bank and in their investment portfolios, and they're also feeling better about what they owe. However, job security is still a pain point, and there are plenty of reasons to worry that we might be headed into a third straight weak summer for the economy. The trouble spots include jobs, high gas prices, the ongoing European debt crisis and more."
A reading of 100 is considered the Financial Security Index's baseline; any reading above 100 indicates improving financial security compared to one year ago, while any reading below 100 indicates decreasing financial security compared to last year.
Here are more details regarding the components of the Financial Security Index:
Overall Financial Situation
- Consumers' feelings about their overall financial situation hit a new high, with 29% saying their overall financial situation is better today than it was 12 months ago, compared to 26% saying it is now worse.
- Those under age 50 are more likely to report a better overall financial situation, while those age 50 and up are more likely to report a worse financial situation than one year ago.
- With the stock market near four-year highs, more consumers report higher net worth compared to one year ago than at any time since polling began in Dec. 2010.
- Twenty-nine percent report higher net worth versus 23% that report lower net worth.
- Households with income of $50,000 or more are the most likely to report higher net worth than last year.
- The margin between those feeling worse about their savings and those feeling better about their savings has been nearly cut in half since Dec. 2011.
- Those under age 30 tend to be more comfortable with their savings, and those age 50 and up tend to be less comfortable with their savings compared to other age groups.
- Americans' comfort level with debt is at its highest point since June 2011.
- More consumers report being more comfortable with their debt than less comfortable.
- Households with annual income of $50,000 or higher are more comfortable than other groups, while households with income under $30,000 are less comfortable.
- Job security slipped following the disappointing March jobs report that was released on April 6.
- Only one in five (20%) Americans say they are more secure in their jobs compared to last year; 22% are less secure.
Investing in Stocks
- Those under age 30 are only slightly more inclined to invest in the stock market than the overall average (23% versus 18%), despite having the luxury of a long time horizon and having a greater burden of retirement savings than any previous generation.
The new study was conducted by Princeton Survey Research Associates International (PSRAI) and can be seen in its entirety here: http://www.bankrate.com/finance/consumer-index/financial-security-poll-0412.aspx.
The PSRAI April 2012 Omnibus Week 1 obtained telephone interviews with a nationally representative sample of 1,000 adults living in the continental United States. Telephone interviews were conducted by landline (600) and cell phone (400, including 191 without a landline phone). Interviews were done in English by Princeton Data Source from April 5-8, 2012. Statistical results are weighted to correct known demographic discrepancies. The margin of sampling error for the complete set of weighted data is plus or minus 3.6 percentage points.
About Bankrate, Inc.
Bankrate is a leading publisher, aggregator and distributor of personal finance content on the Internet. Bankrate provides consumers with proprietary, fully researched, comprehensive, independent and objective personal finance editorial content across multiple vertical categories including mortgages, deposits, insurance, credit cards, and other categories, such as retirement, automobile loans, and taxes. The Bankrate network includes Bankrate.com, our flagship website, and other owned and operated personal finance websites, including CreditCards.com, Interest.com, Bankaholic.com, Mortgage-calc.com, CreditCardGuide.com, Nationwide Card Services, InsuranceQuotes.com, CarInsuranceQuotes.com, InsureMe, Bankrate.com.cn, CreditCards.ca, NetQuote.com, and CD.com. Bankrate aggregates rate information from over 4,800 institutions on more than 300 financial products. With coverage of nearly 600 local markets in all 50 U.S. states, Bankrate generates over 172,000 distinct rate tables capturing on average over three million pieces of information daily. Bankrate develops and provides web services to over 80 co-branded websites with online partners, including some of the most trusted and frequently visited personal finance sites on the Internet such as Yahoo!, AOL, CNBC and Bloomberg. In addition, Bankrate licenses editorial content to over 500 newspapers on a daily basis including The Wall Street Journal, USA Today, The New York Times, The Los Angeles Times and The Boston Globe.
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