For the economy, the run-up to the holidays is critical. Spending is essential to keep many businesses afloat. To open their wallets, people have to feel confident about their financial situation. But the latest Consumer Reports Index uncovers a problem with an important segment of the population.
Most Americans don’t make anywhere near $100,000 a year. But those who do are crucial — their spending helps keeps the economy ticking.
This months’ Consumer Reports Index found the sentiment among wealthy Americans dropped sharply in the past month. It now hovers around 50 like everyone else. That number means 50 percent think their financial situation is worse than it was a year ago.
Those findings echoed in Consumer Reports' Trouble Tracker Index, which shows financial problems are high for people in all income levels — with a marked jump in problems among the more affluent. Those financial problems include not being able to afford a medical bill, missing a loan payment, or losing a job.
All this means challenges for retailers during this critical period of holiday spending. Our survey finds although spending was up in the past 30 days, it lags last year’s numbers for the same period by a wide margin.
And when Consumer Reports asked about spending plans for the coming month, they were also significantly down from a year ago.
The Consumer Reports Index also measures employment. It, too, was down — more people lost jobs than gained them in the past month. The biggest problem was among those earning less than $50,000 a year.