Big turnaround for Financial Security Index
U.S. consumers are feeling more bullish about their balance sheets as the year draws to a close. Though an accompanying survey raises some questions about holiday spending, Bankrate's Financial Security Index has clawed its way back onto positive ground for the first time since August as recent confidence-crushers continued to fade.
"Americans' feelings of financial security have completely recovered from the government shutdown and debt ceiling saga that undermined feelings of financial security in the three prior months," says Greg McBride, CFA, senior financial analyst for Bankrate.com.
The index has risen in December to 100.4, up from 99.3 in November. And, it's a full three points above where it stood in October, after the partial federal shutdown. Any reading above 100 indicates improved financial security compared with one year ago.
Bankrate's Financial Security Index gauges how Americans feel today versus a year ago on vital financial matters. An index value of less than 100 indicates declining levels of financial security; a value greater than 100 reveals higher levels of security compared to 12 months ago.
The index number is computed from a survey of how consumers assess their job security, debt, savings, net worth and overall financial situation.
"Job security feelings turned positive for the first time since September," McBride notes, "completely unwinding the negative sentiment that had prevailed in each of the past two months."
Savings sentiment still sags
The net worth reading looks particularly strong, with those feeling they're worth more outnumbering those feeling they're worth less by 3-to-2. Americans who say their overall financial situation is better currently outnumber those who say it's worse, by 25 percent to 18 percent. That's an improvement from last month, when those results were in a dead heat.
"Savings remains the laggard, with readings virtually unchanged from one month ago," McBride says. "This is the one area of financial security that has elicited negative feelings every month since the poll debuted in December 2010."
If you think your savings could use a boost, take a look at the savings rates at Bankrate.com.