2023 Economic Index

Consumers feel 8% less confident about their financial outlook this month than they did one year ago

The WalletHub Economic Index decreased by over 8% between March 2022 and March 2023. This means consumers are over 8% less confident about their financial outlook this month than they were at the same time last year.

Key Stats – Negative Outlook

Rising stress: Consumers’ stress levels regarding money are nearly 9% worse in March 2023 compared to last year.

Large purchases are not a priority: In March 2023, consumers’ likelikood of making a large purchase in the next six months is more than 11% lower than it was last year.

Low financial optimism: In March 2023, consumers’ optimism about their finances is close to 11% lower than it was last year.

Declining interest in auto purchases: The share of consumers who expect to buy a car in the next six months is about 10% lower in March 2023 compared to last year.

Real estate declines: Home-buying interest among consumers decreased by more than 5% during the past year.

Key Stats – Positive Outlook

Credit score security: The share of consumers who expect their credit score to increase in the next six months is slightly higher (+1.4%) in March 2023 compared to last year.

Expert Commentary

How have consumer spending habits changed during this last year?

“Although the rate of inflation has slowed down, inflation is still there. Consequently, consumers are spending more money on basic necessities, such as utilities, groceries, mortgages, rent, and other essentials than in the past. It leaves less room for higher-end purchases, luxuries, and savings.”
Yuliya Strizhakova – Associate Professor, Camden, Rutgers University

“The year of 2022 was the first time when consumers were able to travel and socialize without COVID restrictions. So, even as they were facing financial uncertainties brought forth by inflation, consumers were spending on restaurant food, travel, and in-person retail shopping as they tried to make up for the lost time. However, this sentiment is starting to shift downward in recent weeks. Consumers continue to maneuver their lives around higher prices, and real wages have decreased. Dollar-wise, consumers may not be spending less due to inflation, but they will become more value-prone when they make purchase decisions.”
Rebecca Jen-Hui Wang, Ph.D. – Associate Professor, Lehigh University; Research Scholar, Northwestern University

Has the current economic downturn encouraged Americans to become more financially savvy?

“Possibly, but the problem is many do not know how to become financially savvy. I think a personal finance course should be required in all high schools (or maybe colleges).”
Greg Bonner – Associate Professor, Villanova University

“I believe so. Consumers adapt to the changing economic environment to suit their own needs and those of their families. They naturally become careful and smart with money during periods of financial adversity as part of their coping mechanisms.”
Yue Pan, Ph.D. – Associate Dean; Professor, University of Dayton

What tips do you have for consumers looking to improve their finances?

“Beyond changing jobs or doing side hustles, consumers can use comparative shopping, look for discounts, do not rush with purchases, especially higher-priced items. Consumers have easier access to price comparisons and savings, so they should take time when they need to make larger financial commitments. They should also keep their finances in check, cut down on subscriptions that they do not need or use, even if it means spending some time on the phone to unsubscribe, possibly re-assess their debt, and identify ways to pay it off.”
Yuliya Strizhakova – Associate Professor, Camden, Rutgers University

“Focus on the necessities first. Then, if one still wants to splurge on luxury products or big-ticket items, choose quality over quantity. Try to resist instant gratification. For instance, it is more fulfilling both financially and personally to plan and save for an item on one’s dream list than to buy multiple cheaper but less meaningful items on a whim.”
Rebecca Jen-Hui Wang, Ph.D. – Associate Professor, Lehigh University; Research Scholar, Northwestern University