The federal government shutdown is contributing to sagging financial security in the U.S., as measured by Bankrate’s monthly Financial Security Index.
It has fallen more than two points in October to 97.4, from 99.5 last month. The index is down for the fourth month in a row and has dropped to the lowest level since February and the second-lowest for all of 2013. Any reading below 100 signifies weaker financial security among American consumers compared to a 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.
Job security — one of the components making up the index — took a serious hit this month amid the budget feud that put the brakes on much of the federal government, says Greg McBride, CFA, senior financial analyst at Bankrate.com.
“With hundreds of thousands of government employees furloughed and many government contractors reeling from the shutdown, feelings of job security plummeted to the lowest level in nearly two years,” he says. “Just 14 percent now feel more secure in their jobs than last year, while 26 percent feel less secure — the most downbeat reading since November 2011.”
Those who feel less secure in their jobs outnumber those feeling more secure across every age group and income bracket, McBride notes.
This month also saw Americans growing more uneasy about their savings. Nearly 4 in 10, or 38 percent, say they feel less comfortable than they did a year ago about the amount of money they have in savings. That’s up from the 32 percent who were in that camp during June, when the overall index reached an all-time high.
Among consumers earning less than $50,000 a year, those feeling worse about their savings currently beat out those who feel more comfortable by a ratio of about 4-to-1.