The Bloomberg-YouGov Household Economic Activity Tracker (HEAT): October 2010 results
The forward looking HEAT index recorded its second lowest result ever (September 2010 was lowest at -33%) at -32% as uncertainly about the strength of the economic recovery remains prevalent.
A fifth (20%) of people expect their wages to be lower in a year’s time
The index found:
• Consumers’ outlook for their household financial situation remains near record low (-32%)
• Month-on-month household financial situation remains -24% for the third consecutive month
• A quarter of people (25%) believe their job is less secure than a month previous
The 25% of respondents reporting that their jobs are less secure than a month earlier contribute to a dreary forward view.
Expectations for employment income 12 months from now achieved its lowest net score since HEAT started in January 2010. 20% of respondents expected their employment income to be lower a year from now, the highest number ever recorded. Only 24% of people expect their employment income to be higher in 12 months, the lowest number ever recorded on HEAT.
October results also showed a sharp decline when it comes to house prices with 35% of respondents feeling the value of the home they live in had declined over the previous month. 36% of respondents expect the value of the home they live in to decline over the next 12 months with only 20% expecting the value to increase.
The combination of low job security, an expected decline in income, falling property prices and a growing sense of an increase in the cost of living has resulted in nearly half of people (49%) thinking their household financial situation will be worse 12 months from now.
Todd Davis, Financial Services Consulting Director at YouGov commented,“There is certainly not just one aspect of people’s lives driving the HEAT index lower, it is an ugly cocktail of declining job security, rising prices, fear of house price declines and lost income which has resulted in deep economic pessimism among the general public.
Each month we ask respondents if this month is better or worse than the previous month for spending money on a big ticket item (such as a car, holiday or household appliance). October scored the lowest “better” score since we started the HEAT survey with only 1 in 20 (6%) of respondents feeling that this month was better than the previous for spending on a big ticket item. While GDP figures have shown growth returning to the economy it would seem consumers have yet to develop any confidence in the recovery.”
