Financial Stress Inches Up In June

Financial Stress Inches Up In June

The IBD/TIPP Financial Stress Index for June indicates that the situation has not improved from last month. Here’s a look at what is driving up financial stress among Americans and who is feeling it most.

Raghavan Mayur
Raghavan Mayur

The Investor's Business Daily/TIPP Financial Stress Index increased for the second month in a row by 1.3 points or 2.3% from 57.7 in May to 59.0 in June. The previous increase in May was 0.9 points.  This month's reading of 59.0 is above the index's three-month moving average of 57.8, reflecting the underlying negative momentum.

Relevance

The IBD/TIPP Financial Stress Index is an accurate indicator of Americans' financial stress related to paying bills and making ends meet.

Two-thirds of the economy is driven by consumer spending.  When people are stressed, they are hesitant to spend money.

The index also tracks job-related tensions, which rise when the labor market is tough.

By The Numbers

The IBD/TIPP Financial Stress Index is a one-of-a-kind metric for evaluating financial stress. In December 2007, we began using it to track financial stress.

We compute the index from responses to the questions: thinking of your personal finances, compared to the past three months, do you feel more stressed these days, less stressed these days, or feel the same level of stress?

The index ranges from 0 to 100; the higher the number, the more the stress, a reading of 50.0 is the neutral point.

Overall, the stress index, in June, at 59.0 is:

  • 2.3% higher than the May reading of 57.7,
  • 0.64% higher than the index's historical average of 58.6,
  • 15.5% lower than the pandemic high of 69.8 posted in April 2020, and
  • 15.0% higher than the pre-pandemic level of 51.3 posted in March 2020
IBD/TIPP Financial Stress Index Monthly Poll

The Three Stressors

We have identified three sources of financial stress in our data.

  1. Job sensitivity
  2. Ability to pay bills and make ends meet
  3. Vaccine issue
TIPP Poll Topline Financial Stress Index
Groups posting higher stress than their historic averages are highlighted in red

Job Sensitivity

As we have shown earlier, 54% of U.S. households are job-sensitive.   We consider a household job sensitive if at least one family member is actively seeking full-time employment (job seekers) or if the family is concerned that one of its members will be laid off within the next year (concerned).

At present, 43% have at least one member looking for a full-time job (job seekers). 34% are concerned that a household member may lose their job in the coming 12 months (concerned).

The financial stress levels of different groups are given below.

  • 64.9 job seekers (43% of households)
  • 69.8 concerned(34% of households)
  • 65.1 for job sensitive (54% of households)
  • 52.0 for not job sensitive (46% of households)

Ability to Pay Bills

Approximately 56% are concerned about keeping up with living expenses, such as car payments or rent. 39% are not concerned.  The concerned group shows significantly higher stress.

  • 67.6 for those concerned about paying bills (56% of Americans)
  • 46.6 for those not concerned about paying bills (39% of Americans)

Vaccine Issue

Our data has shown that 26% of Americans don't plan to vaccinate soon. Their dilemma about getting vaccinated may relate to their ability to work and financial stress.  The financial stress levels by vaccine status are as follows:

  • 63.7 for those not planning to vaccinate soon
  • 57.7 for those who are fully vaccinated or have had one shot

Under The Hood

This month 9 of the 36 groups we track improved on the index and achieved lower stress levels.  24 of the 36 groups reported increases in stress.

All 36 demographic groups, TIPP tracks, scored above 50, indicating broad-based stress.

Here are the ten demographic groups with the highest stress levels based on a three-month simple moving average.  Some of the financial stress is driven by politics.  Conservatives and Republicans are concerned about the new administration's policies.

IBD/TIPP Financial Stress Poll

The chart below shows the ten demographic groups with the least stress.  The least stressed groups are Blacks, moderates, liberals, and the 65+ age group.

IBD/TIPP Least Stressed Index

The Cure

Jobs are the solution to the problem.  Washington must snap out of its petty fighting and pass an infrastructure bill that both parties can agree to.  Americans are running out of patience, and Washington must stop fiddling while Rome burns.


TIPP Takes

Iran Says It will Never Hand Over Images Of Nuclear Sites To UN Nuclear Watchdog

The speaker of Iran's parliament said Tehran will never hand over images from inside of some Iranian nuclear sites to the U.N. nuclear watchdog as a monitoring agreement with the agency had expired.

Iranian Flag
Flag Of Iran

The IAEA demanded an immediate reply from Iran on whether it would extend the monitoring agreement, prompting an Iranian envoy to respond that Tehran was under no obligation to provide an answer.

Secretary of State Antony Blinken said that any failure by Tehran to extend the monitoring agreement would be a "serious concern" for broader negotiations.

Parties involved in the talks on reviving the deal, which began in April in Vienna, have said major issues are still to be resolved before the nuclear deal can be reinstated.


China Challenges Australia Anti-Dumping Measures At WTO: Govt

The suit - regarding Chinese exports of train wheels, wind turbines, and stainless steel sinks - comes a week after Canberra challenged Beijing's crippling tariffs on Australian wine exports.

Chinese Wind Turbines
Wind turbines

It aims to "safeguard the legitimate rights and interests of Chinese companies," Chinese commerce ministry spokesman Gao Feng said.

Australia has imposed tariffs on Chinese-built train wheels and wind turbines since 2019. Trade Minister Dan Tehan said that Australia would "vigorously defend the duties that we have put in place."

Beijing has imposed tough economic sanctions on a range of Australian products in recent months, ranging from high tariffs to disruptive practices across several agricultural sectors and tourism.

China in November announced tariffs of up to 218 percent on Australian wines, which it said were being "dumped" into the Chinese market at subsidized prices.

The crackdown virtually closed what had been Australia's biggest overseas wine market, with sales falling from Aus$1.1 billion (US$ 840 million) to just Aus$20 million, according to official figures.


Indian Air Force Base In Kashmir Hit By Explosions

Indian police suspect explosive-laden drones were used to attack an air force base in Jammu city.

Air Force Station In Jammu Indian Administered Kashmir

The air force base, where "two low intensity explosions" were reported, is located in Jammu city in Indian-administered Kashmir. Officials are calling it the first such incident of its kind in the country.

The explosions in the early hours of Sunday injured two people.

The airbase in Jammu is also used as a civilian airport. There was no disruption to civilian flights.

New Delhi has stationed more than half a million forces in the region – making it one of the most militarized zones in the world – as it tried to quell an armed rebellion that erupted in the late 1980s.


Turkey Grants Citizenship To Former Al Qaeda Commander

Ankara has granted Turkish citizenship to former al Qaeda commander, Syrian national Manar Al-Shami, journalist Lindsey Snell said.

Al-Qaeda Manar Al-Shami
Al-Qaeda Manar Al-Shami

Rebranding a number of Syrian factions as the Syrian National Army (SNA), critics say Turkey has incorporated extreme jihadist groups into the SNA.

Turkey had supported the foundation of Hayat Tahrir al-Sham (HTS), a group known to have incorporated fighters from the Nusra Front, which had pledged allegiance to al Qaeda, last year.

In January, German police arrested four people, two of them Turkish-originated German citizens, accused of soliciting financial donations in Europe for Syrian militant group Tahrir al-Sham.

Approximately 3 percent, around 110,000, of the 3.6 million Syrians living in Turkey have been granted Turkish citizenship, according to data from the interior ministry.

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