To life and annuity issuers, middle-class U.S. consumers started to look shakier in the first quarter of the year.
The American Council of Life Insurers assessed consumers' emotional temperature for its Financial Resilience Index program by crunching data from sources such as the Federal Reserve banks, the U.S. Bureau of Labor Statistics and the University of Michigan.
The ACLI computes its resilience index figures and index component figures by looking at how the latest figures compare with the average recorded since mid-2000.
The retirement readiness component in the index fell to 0.3 percentage points below the historical average, down from 9.8 percentage points above the historical average in the first quarter of 2024.
The overall Financial Resilience Index dropped to 5 percentage points above the historical average, down from 34.3 percentage points above the historical average a year earlier.
What it means: "The Financial Resilience Index shows that middle-class financial resilience is returning to historical norms," according to ACLI analysts.
The ACLI also sponsored a survey of 3,331 U.S. adults ages 18 and older in late June and early July, and 55% of the 1,309 respondents with household income from $50,000 to $149,999 said they were very concerned or somewhat concerned about the risk of a serious decline in their households' finances in the coming months.
Although the resource and cost data used in the index looked good in the first quarter, the results of the second-quarter survey "indicated that households are anxious about the future," the analysts said.
Methodology: The ACLI analysts base the retirement readiness index component on retirement asset levels and University of Michigan survey results showing how likely people think they are to have a comfortable retirement.
The overall resilience index also includes data on income; access to consumer credit; consumer concerns about delinquent debt; the cost of the essentials of life; the cost of health care, day care and education; and the cost of modest luxuries, such as new vehicles and hotel stays.
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