Consumer Reports Index: Consumers' mood low, troubles rise

Consumer sentiment remains low for many Americans, and consumers are reporting more financial troubles, according to the latest Consumer Reports Index, published today. Lower-income people—those making less than $50,000 a year—are shouldering more financial pain than the rest of the population. And consumers living in the Western part of the U.S report a worse financial outlook than do those in other regions. 

The Consumer Reports Index, a composite of several measures, shows consumer sentiment nationwide at 40.3, rising only slightly from a low, 38.1 last month. When the index is greater than 50, more consumers are feeling positive about their financial situation. 

At the same time, this month's Consumer Reports Trouble Tracker Index, which measures negative household financial events, rose to 66.7, its highest ever. The percentage of consumers who reported negative events dropped slightly, but the total number of negative events was up, from 1.6 to 1.9 per household, the greatest increase in 6 months.

Some details:

• Job losses mounted. The Consumer Reports Employment Index declined markedly in October. The proportion of respondents reporting job losses was 7.7 percent, compared with 5.6 percent last month.

• Lower-income households had more troubles than average. The Consumer Reports Trouble Tracker revealed that more than a quarter (26 percent) were unable to afford afford medical bills or medications in the past 30 days, versus 15.1 percent for all Americans. Twelve percent of this group lost a job or was laid off, compared with 7.7 percent of the general population. Another 12 percent lost medical care or experienced reduced coverage, compared with 7.2 percent of total respondents.   

• Spending stayed the same. The Consumer Reports Past 30-Day Retail Index shows purchases in the past 30 days about the same as in the prior month. The index was up for major appliances, but down for major home electronics and personal electronics. 

• Consumers plan to spend more for electronics, but not for other items. Planned purchases of personal and major electronics were up for October versus the prior month. In general, however, plans for future purchases remained about the same as our measure in September. 

• Sentiment was worst in the West. Consumer sentiment took a dive in the West, down to 32.8. In the North/Central region and the South, sentiment remained even, at 41.9 and 43.2. Residents in the Northeast reported a modest uptick in consumer sentiment, to 42.3.

"The economy is in a precarious position balanced between recovery and further decline," concludes the report, published by the Consumer Reports National Research Center. Without substantial improvements as measured by the Trouble Tracker, Employment and Retail indices, it adds, "it is doubtful that a meaningful consumer recovery will be mounted in this calendar year."

The Consumer Reports Index reflects results of a nationwide, representative survey of Americans conducted last week by the Consumer Reports National Research Center. To read more about the Consumer Reports Index, including how it was conducted, click here.