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Political polarization and market-driven news are putting increasing strain on public trust in information, highlighting that reliable data on consumer financial health is critical for businesses and advertisers to stay ahead. The CivicScience Consumer Financial Health Index (CFHI) offers a real-time and accurate pulse on how Americans are feeling about their finances, equipping decision-makers with the insights needed to anticipate shifts in spending, tailor messaging, and navigate an uncertain market with greater confidence.
Months of Increasing Sentiment End in August
Momentum in consumer financial sentiment came to a halt in August after three months of steady gains. The combination of a bleak jobs report, tariffs, and the persistent cloud of economic uncertainty caused the index to drop 0.75 points. This drop was observed among all age groups, but was most pronounced among Americans 55+, who saw a 1.08-point decrease from July.
Where do you stand?: How’s your financial health?
Investing Outlook Falls, While Debt Outlook Hits New Low
A breakdown of the CFHI’s components reveals what fueled August’s decline. Four out of the five indicators fell, led by a 1.43-point drop in investing outlook. Debt outlook also slipped by 0.71 points — a more modest decline, but debt outlook continues to set all-time lows. On the other hand, the CFHI’s leader and stalwart of relative consistency in credit outlook increased slightly.
Turning to Debt for Holiday Shopping via BNPL
With many Americans already anticipating higher debt in the months ahead, the holiday season may intensify financial pressures and the need to take on debt. As shoppers gear up for the gift-buying season, Buy Now, Pay Later (BNPL) has become a key tool for stretching budgets. CivicScience data show that 28% of shoppers are now more likely to use BNPL this year, up 23% from 2023.
Debt Fears Shape Holiday Shopping Choices
Debt worries are also influencing where consumers plan to holiday shop. Those anticipating higher debt in the months ahead are anticipating spending less at large retailers and more at small businesses or local boutiques. CivicScience data suggest this isn’t an isolated behavior, but part of a broader trend among holiday shoppers.
Weigh In: How concerned are you about rising consumer debt in the US?
The August CFHI reading highlights just how fragile consumer sentiment can be in today’s market of uncertainty. Months of gains suddenly halted and slightly reversed over the period of 31 days. And these aren’t just feelings, as the holiday shopping data above shows, consumers are acting based on how they feel. With this in mind, it’s critical for retailers, marketers, and advertisers to remain agile and prepared for changes on a dime as holiday shopping efforts ramp up.
